Agricultural land that is cultivated, run, and maintained by people, groups, or businesses with the intention of raising crops or livestock is referred to as managed farmland. In order to maximise the production and sustainability of the farmland, the term "managed" means that particular procedures and methods are used.
Managed farmlands have recently become a new asset class that have become very popular. Prior to recently, there was a significant barrier to enter for ordinary investors (with no farming experience) who wanted to benefit from the managed farmland assets' rising value.The recently amended Karnataka Land Reforms Act, 1961 now permits any individual or institution from non-farming background to own agricultural land. This has opened up the market for investments in managed farmlands.
Managed farms are a modern asset class.
Managed farmlands are nothing but farmlands that are owned by individuals or institutions but cared for by an experienced agency. Managed farmlands like any other land are tangible and immovable assets. However, they can be highly productive land parcels depending on the type of management, plantation and level of resource efficiency. The ever appreciating value of land coupled with cyclical crop or timber harvest provides a passive wealth creation opportunity for new-age investors.
Farmland investments become increasingly alluring and profitable as the global need for food and timber rises. Farmers are under pressure to accomplish more with the same resources due to ongoing population expansion and limited land area. Therefore, areas with reliable and sufficient surface and groundwater resources will become more valuable as holdings. These elements working together will increase the value of farmland and open doors for early new-age investors in international farmlands.
The Housing Market in India
The most popular asset type in India for a very long time has been real estate. The second largest employer in the nation (after agriculture) is the real estate industry since it has historically been such an alluring prospect. It has consistently drawn investors searching for passive income, and the market has been given a tremendous boost by the rising urbanisation. The Indian real estate market is, however, in a condition of collapse. Numerous real estate firms are in debt and there is an expanding supply of unsold real estate projects as a result of inadequate regulatory frameworks. People are now searching for alternative investment opportunities as a result of this predicament and the Covid-19 outbreak.
Why do Managed Farmland Investments Pay Off Better Than Real Estate?
A managed farmland system enables people to invest money in a farm plot and then see their assets increase without having to deal with the inconveniences of managing it themselves. Although the value of the property will undoubtedly increase in real estate, it will always remain only land. With high-value timber plantations or cyclical agricultural production, managed farmlands can outperform real estate. This means that a farmer who makes an investment benefits from both the rising value of their property and the return on investment offered by the timber. As a result, there is a passive income that generously benefits the environment by supplying an ever-renewing green cover. People now put their health before everything else as a result of the pandemic, and One can choose to invest in a big area of vegetation in the current climate.
What are the benefits of owning Managed Farmlands?
Having a managed farmland based on agroforestry principles has a number of advantages. Planting trees improves the soil's fertility and biodiversity in the area. Through carbon sequestration, forests can enhance carbon storage, which is crucial to lowering greenhouse gas emissions that fuel climate change. Because diverse plants and tree species support one another symbiotically, companion planting of plants that benefit one another increases output. The agroforestry environment also gives wildlife lots of room to forage and reproduce, which is essential for creatures to adapt and thrive.
Besides the environmental significance, managed farmlands also function as a much needed weekend getaway. The relaxed atmosphere in the bliss of nature provides a departure from the hustle and bustle of the city, and these eco-retreats come with a host of common amenities like cottages, gazebos, and camping sites that could enrich one’s holiday experience. If you are wondering where to look for managed farmlands, Urban Farmers, Holiday Valley, and Jain Farms are the one-stop destinations in Bangalore that cater to this promising asset class.