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Food securityTech investors turning to agriculture as a safe bet

Published 5 December 2014

Investors and entrepreneurs are turning their sights toward the world of farming, seeing the next decades as especially challenging for because of the need to feed the expected ten billion people who will then people the planet. The technologies that these companies are investing in include not just the expected hallmarks of advanced efficient farming — robot workers, better software, and food substitute technology — but also farmland itself.Manysee the investment as a more solid and safer relative one amidst to the much more volatile tech prospects. “Farmland is more of a safe way to invest your savings,” says one investor. “Farmland isn’t going to disappear. Dropbox could disappear.”

Investors and entrepreneurs are turning their sights toward the world of farming, seeing the next decades as especially challenging for because of the need to feed the expected ten billion people who will then people the planet.

As the San Jose Mercury News reports, Silicon Valley and its tech tycoons are pushing their way into every stage of the farming and food production process, analyzing the efficiency and necessity of old traditions.

“The food sector is wasteful and inefficient,” said Ali Partovi, an investory from San Francisco who is putting his money in agricultural startups, “Silicon Valley has a hubris that says, ‘That’s stupid. Let’s change it.”

Referred to as the “ag-tech” sector, the interest by major financial players has led many analysts and experts to predict that investment in food industries could possibly top most tech sectors in another five years. In the third quarter of this year alone, venture capitalists and private equity firms invested $269 million in forty-one different ag-tech startups. Since 2009, overall investment has grown at the pace of 63 percent each year.

“It’s going to be bigger than cloud software, it’s going to be bigger than Big Data, because everybody eats,” said Paul Matteucci, a partner with U.S. Venture Partners, “And it’s going to be completely entrepreneur led.”

The technologies that these companies are investing in include not just the expected hallmarks of advanced efficient farming — robot workers, better software, and food substitute technology — but also farmland itself.

Farmland LP, a San Francisco-based company, buys farms and then converts them into organic pasture that farmers, cattle, and ranchers can all share and contribute toward. The model has attracted individuals such as Scott Banister, an early PayPal investor, and former Facebook executive Owen Van Natta. Many, it is reported, see the investment as a more solid and safer relative to the much more volatile tech prospects.

“There is a kind of renaissance in technology in agriculture right now,” said Ryan Jacobsen, the executive director of the Fresno County Farm Bureau, “The technology is becoming more mainstream because more and more people believe that it will help them produce more. These technologies actually do make a difference on your bottom line. It’s an exciting time to be a farmer right now.”

Farmland LP investors have reported an 8 percent return on investment, admittedly a fraction of what can be gained in tech sectors, but many seem content with the more predictable returns.

“Farmland is more of a safe way to invest your savings,” Partovi added. “Farmland isn’t going to disappear. Dropbox could disappear.”