February 22, 2011 1:56 PM EST
African farmland investment has the potential to match the exponential growth of Brazil's agricultural industry, the head of business development at privately owned agricultural operator Quifel said.
"The best benchmark is really Brazil. What took the Brazilians around 30 years, one should try to do it in 10-15 years," Pedro Marques dos Santos, head of business development at Quifel said, referring to how Africa could emulate Brazil's dominance in global agricultural investments.
Quifel operates in Africa, Latin America and Southern Europe and began operations with a palm project in Brazil.
"In 2007, Quifel also embraced the Sub-Saharan Africa land development opportunity," Marques dos Santos said, noting higher land prices in Brazil as one driver.
Investors poured $26 billion in foreign direct investment into Brazil in 2010 and around one-third of all funds and companies investing in farmland globally have committed funds to Brazil, the OECD said in a report.
Follow us
But anyone interested in buying up Brazilian land may find it tough as last year the attorney general issued a ruling that limited the area of land foreigners were able to purchase.
The effect has been to cap at 12,350 acres the amount of land that can be bought by a foreign investor or a company that's more than 50 percent foreign-owned, prompting some investors to look to alternative regions.
This, combined with rising food prices, has spurred global interest in African farmland.
Global food prices are at record levels and are likely to remain so in the months to come, according to the U.N.'s Food and Agriculture Organization.
Africa has lower production costs than Latin America due to cheaper land and labour yet could offer similar yields, Marques dos Santos said.
There's a bigger need to invest in infrastructure and logistics in Africa but, "The end result is to expect high returns if farm talent is able to overcome everyday operational difficulties."
Brazil, Latin America's largest country, is one of the world's leading exporters of agricultural commodities including coffee, sugar and soybeans.
SUB-SAHARAN AFRICA
Quifel, which runs African farms in Mozambique, Sierra Leone and Angola, chose these countries based on their coastal locations and expectations of high economic growth, Marques dos Santos said.
JP Morgan London Trader Losses 'Double to £4.4bn'
Existing Home Sales, Durable Goods, China PMI: Economic Events For May 21 - 25
Facebook Founder Zuckerberg Weds After IPO: Good or Bad Move?
US Lets China Bypass Wall Street For Treasury Orders: Reuters Exclusive
Barclays To Sell Entire Stake In BlackRock For $6.1 BillionWe value your privacy. Your email address will not be shared.
