Why Farmplots are been considered as new Gold

Farmland as an investment asset has seen a commendable boon over the last few years. Apart from traditional assets like stocks, apartments, FDs and gold; this high return and less riskier asset has made an effective position in a well diversified portfolio. In India, Gold is not just a symbol of economic wellbeing but is also an emotion, a tradition and a prosperity. Though nothing can replace the value that ‘Gold’ holds in Indian society and mindset, there surely has been a shift towards a new asset class that is Farmlands. 

While both have some unique characters and risks associated, Let's dive into the benefits of Farmlands and the rise of investor demands for farmlands 

1. Inflation hedge:

As per anarticle, Average farmland returns have historically exceeded inflationby 6.1% per year over the last 50 years.Whereas In a country like India, where every saving instrument may not provide returns, gold fares well when the inflation rate exceeds the interest rate. While both assets may provide a hedge against inflation, farmland is primarily an income-generating asset, while gold is often seen as a store of value or a safe-haven asset during times of economic uncertainty.

2. Correlation to stock indices:

Farmlands are not correlated to stock indices while gold is inversely correlated to the market, which means when the stock prices go up the gold prices go down and vice versa. But since farmlands are independent assets, they are less volatile.

3. Constant Income:

While investment in Gold is generally long term and the investor derives value only at the maturity or we must say at the time of sale,  When you invest in farmland, you earn appreciation value and cyclic value from the yields produced on your farm.  This keeps the environment green and pockets full round the year.

4. Limited supply: 

Just like gold, the supply of farmlands is limited and cannot be increased easily. The population continues to grow, and people continue to need to eat, but high-quality farmland isn’t created every day. In fact, the amount of arable land is declining due to a changing climate and rapid development, meaning suitable farmland will only become more valuable.

5. Accessibility: 

Investing in gold is relatively easy and can be done through various investment vehicles such as exchange-traded funds (ETFs) and mutual funds. However, investing in farmland can be more complex and requires more expertise, research, and capital.

6. Grow your organic food:

A farmland provides you with an opportunity to grow your own food. In today’s world when almost everything you buy from market is adulterated, the demand for organic food is at its peak and so are its charges. With a managed farmland investment, you can try your hands in farming under professionals and bring healthy home grown food to your family. You can also gift or sell the excess produce for more returns. 

7. Environmental benefits:

Farmlands does not only influence and help the investor but also uplifts and works forward in the development of the country and the agricultural sectors. Several experts have agreed that farm investment is a safer option for parking one’s funds as it lends safety to investors’ money.

Overall, investing in agricultural land is a long-term investment that requires patience and research, but it has the potential to provide significant returns over time. We do not say that Farmlands have replaced Gold in any terms, its just that this asset has surpassed the gold investments in the country due to its high and stable returns. And that’s the reason farmlands are termed as New Gold in the investment sector.

Imagine we’ve convinced you of buying a farmland being a bigger and wiser capital investment, you would probably wonder the following:

Where, How, and When and here we pave the path towards the answers; Farmlandbazaar.com