Pela Terra
Sponsor
For centuries, gold has been considered the ultimate safe-haven asset. But what if there was an investment that not only beat gold’s stability but also outperformed its returns over the long term? While also qualifying you for Portugal’s Golden Visa and benefitting the climate & society?
If you’ve decided on the Portugal Golden Visa program but are still searching for an investment option that fits both your risk profile and returns appetite, then this article is for you.
The answer lies in a relatively underappreciated asset class: farmland. Over the past three decades, farmland has consistently generated higher returns than gold, making it one of the most compelling investment opportunities available today. In fact, according to The Motley Fool, “farmland has outperformed all other asset classes except the Down Jones REIT Index” over the last 30 years.
For Golden Visa investors who traditionally prioritize capital preservation, this is especially interesting. Unlike real estate, which is subject to market fluctuations and policy changes, farmland is driven by fundamental supply-and-demand factors, ensuring a steady appreciation in value over time – which makes it an attractive option for those seeking long-term stability.
Farmland vs. Gold: A Proven Track Record
According to data from the U.S. Department of Agriculture (USDA), farmland has delivered an average annual return of approximately 11.5% since 1991. This means it has outpaced gold, which has returned around 7.8% annually over the same period (USDA). Additionally, research from Savills confirms that farmland values have seen a 10% compound annual growth rate globally over the past two decades. In contrast, while gold has experienced periods of rapid appreciation, its volatility, and cyclical downturns make it a less reliable long-term store of wealth compared to farmland (FarmTogether).
A major reason for farmland’s superior performance is its ability to generate both capital appreciation and consistent income. Unlike gold, which relies solely on price appreciation, farmland produces annual revenue through crop yields or lease payments, creating a dual-income structure (Manulife). The National Council of Real Estate Investment Fiduciaries (NCREIF) reports that farmland investments have delivered positive returns every year since 1990, even during periods of financial crisis (NCREIF).
Low Volatility and High Returns
Seasoned investors are familiar with the trade-offs between risk & rewards. But there are some asset classes that are able to offer strength in both areas simultaneously – and farmland is one of them.
Delivering returns that are above Gold and only just below the S&P 500, but at a significantly reduced volatility to both asset classes, farmland can claim to be a goldilocks of the investment world. Consider the graphic below, based on data from Nasdaq & the S&P 500, which positions farmland against other comparable asset classes:
It is this investment profile that is driving the likes of Bill Gates and Warren Buffet to invest in large amounts of farmland globally, with both recently stating that they preferred it to crypto. Warren Buffet has also explicitly stated how he prefers farmland to gold because of the production value it offers alongside asset appreciation.
Why Farmland Consistently Appreciates in Value
There are various reasons driving farmland appreciation, including:
A Declining Supply of Arable Land
Farmland’s increasing value is driven by a simple economic principle: supply is shrinking while demand is rising. Studies from the United Nations estimate that the world loses around 30 million acres of arable land annually due to urbanization, climate change, and soil degradation (UN FAO). If current trends continue, available farmland per capita will decrease significantly, making agricultural land even more valuable.
Increasing Global Demand for Food
As the global population is expected to reach 9.7 billion by 2050, food production will need to increase by 60-70% to meet demand (The UN). This structural demand ensures that farmland remains a critical resource, with prices consistently appreciating as investors and governments recognize its importance (Savills).
This graphic demonstrates these competing forces of supply & demand, using the example of demand for fruits and nuts:
Inflation Hedge and Economic Resilience
Farmland has historically provided an effective hedge against inflation. During the 2008 financial crisis, when equity markets collapsed, U.S. farmland values increased by nearly 30%, while gold prices surged by 60% (FarmTogether). However, gold’s volatility makes it a riskier asset in comparison. Farmland, on the other hand, has demonstrated stability through multiple economic cycles, making it an attractive choice for investors seeking capital preservation (Manulife).
The Rise of Sustainable Agriculture and Carbon Markets
With the global push toward sustainability, investors are increasingly turning to farmland as a means of diversifying their portfolios while contributing to environmental conservation. Regenerative agriculture, which enhances soil health and increases carbon sequestration, is becoming a major driver of farmland appreciation (Manulife). Additionally, the emergence of carbon credit markets is creating new revenue streams for farmland owners who adopt sustainable practices (Savills).
Investing in Farmland Through Portugal’s Golden Visa
With a strong supply of well-priced irrigated farmland following the opening of the Alqueva Dam in 2010, Portugal represents a particularly attractive opportunity for farmland investing. Institutional investment has risen by 120% since 2021, with €2 billion being invested in 2023.
Coupled with the fact that Portugal boasts the highest-rated Golden Visa program in Europe, it is no wonder that Pela Terra, a Portuguese agricultural fund, are already raising their second fund within the Portuguese agricultural sector.
“We invest in agri-businesses in Portugal for three main reasons,” says Alex Lawry-White, an Advisory Committee member at Pela Terra. “First, it enables us to innovate in improving the environmental impact of agriculture on biodiversity and climate change. Second, it allows us to create jobs in underdeveloped areas of Portugal. Most importantly, from a client point of view, it allows us to offer a low-volatility investment.”
Pela Terra: The Golden Visa Investment Fund for Farmland
Pela Terra’s model is strikingly simple and leverages the attractiveness of farmland to deliver positive returns for investors, society, and the environment alike.
Now raising their second fund, the team uses capital to buy olive and almond farms within Portugal. They bring in teams to operate these farms, harvesting the crops each year and exporting those harvests to Spain.
That model continues while the value of the land & assets appreciates in the background. Driven by the supply & demand economics of climate change and food requirements, the fund aims to sell its farms at the end of the holding period for a sustainable profit, which is shared with investors.
The Ultimate Portugal Golden Visa Investment
Farmland is not just an agricultural asset—it’s a financial powerhouse that has quietly outperformed most traditional investments, including gold. As the supply of arable land decreases and food demand continues to rise, farmland will only become more valuable. For investors seeking both financial returns and a pathway to European residency, Portugal’s Golden Visa investment in farmland through Pela Terra presents an unparalleled opportunity.
By making farmland accessible to global investors, Pela Terra is bridging the gap between sustainable agriculture and financial prosperity. For those looking to secure their wealth in a tangible, income-generating asset, farmland is the new gold.
If you’d like to learn more and speak to one of the experts at Pela Terra, you can book a call via their website.
Alternatively, you can email them here (nick@pelaterra.com) or drop them a message on WhatsApp using +44 7768 929321.
