Managed Farmlands: A new asset class for new age investors

India has witnessed growth & expansion in several real estate asset classes that are often categorised as alternative assets since they fall outside the more mainstream assets such as stocks, bonds & shares etc. Commercial real estate includes any property that primarily generates income or supports businesses, whereas residential properties are for the purpose of living but can also provide passive income opportunities.

In the last few years a new asset class of managed farmlands has emerged and has quickly gained popularity. Until recently there was a high barrier to entry for individual investors (from a non-farming background) to take advantage of the appreciating value of managed farmland assets.

The Indian Real Estate Market

For a long time, real estate has been the most favoured of all asset classes in India. Since it has been such an attractive proposition, the real estate market is the second-highest employment generator in the country (after agriculture). It has ceaselessly attracted investors looking for passive income, and the rapid urbanization has added a huge impetus to the market. But what is also true is that the real estate market in India is collapsing. Thanks to flawed regulatory mechanisms, several real estate companies are in debt, and there exists an increasing inventory of unsold real estate projects. This situation, coupled with the Covid-19 pandemic, has resulted in people looking for different avenues of investments.

Why are Managed Farmlands more rewarding than Real Estate?

What are the benefits of owning Managed Farmlands

There are several benefits to owning a managed farmland based on the principles of agroforestry. Trees increase the biodiversity and soil fertility of the region they are planted in. Forests can increase carbon storage through carbon sequestration, which is essential in order to reduce greenhouse gas emissions that enable climate change. Companion planting of mutually beneficial plant species leads to a rise in productivity as different species of plants and trees support each other symbiotically. The agroforestry landscape also provides plenty of scope to wildlife for foraging and breeding, which is vital for animals to adapt and survive.

In the scenario where our homes are becoming offices and vacations are becoming our homes, owning farmland is a futuristic way of having a weekend getaway always at bay. It not only brings you closer to nature but also fulfils your aspirations of farm owning as well. Other reasons why managed farmlands are set to be highly popular in future include- the increase in bio-diversity and help to revive nature, the need for a relaxed atmosphere beyond the city’s rush, the huge growth potential in agriculture and their value as a passive income opportunity.
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