Investors In Brazil Encouraged To Invest In Agricultural Land

China has insatiable industry. India has a huge and growing population. Against these global giants, Brazil's largely rural population of 190m may look like small fry. But the swathes of agricultural land in Brazil are powering this country's impressive growth.

Brazil's Farms Are An Attractive Investment

Brazil's strength lies in its land, replete with raw materials, oil and agricultural promise – the mighty Amazon river boasts the world's largest reserves of fresh water. These resources are powering an economic growth of 7.5%.

With foreign investors possessing the same rights as domestic buyers, and the Brazilian government actively seeking to encourage foreign investment, agricultural property offers the opportunity for overseas investors to tap into Brazil's growth.

As global food prices soar, Brazil's swathes of rural farmland in regions such as Bahia – already accounting for 30% of GDP – offer an attractive long-term investment opportunity. Agrifirma Brazil, a UK farm fund backed by Lord Rothschild, has embraced under-valued regions. In April 2010, the Financial Times highlighted regional growth, claiming that ‘western Bahia has also attracted interest from foreign investors… “today, without a doubt, Bahia is better positioned because of the quality of land and logistics”' (FT, 15/04/10) according to an Agrifirma spokesman.

Brazil's Farms Are A Secure Investment

As President Dilma Rousseff has just called for Brazil's National Oil Agency to regard ethanol as a ‘strategic fuel' and massively boost production, much of Brazil's farmland is also a secure investment.

Ethanol and other eco-fuels are a booming domestic and international market, promoted and utilised by everyone from Barack Obama to Brazilian farmers. By law, all fuel sold in Brazil contains 20-25% ethanol, and all-ethanol cars are rapidly gaining market share. With domestic vehicle sales booming by 24% in February 2010 alone, Brazil faces an 150m litre ethanol shortfall. This is currently being met with US imports, but it's evident that Rousseff would far rather maintain fuel self-sufficiency by producing ethanol domestically.

Investing in fast-growing agricultural areas such as Bahia also reduces the risk of being caught up in the urban property bubble which may be developing in Rio de Janiero and Sao Paolo, recently flagged in the South China Morning Post. As Dan Freeman, the managing director of a British-backed Brazilian property company, Brazil Bahia Property, notes, ‘rural areas such as Bahia are still massively under-valued, yet their huge agricultural and industrial potential is ripe for development.'

Discover more about investing in Brazil.

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