March 24, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

As FarmTogether continues to work to democratize agricultural investing for all investors, farmland investment platform FarmTogether announced the launch of its Sustainable Farmland Fund. 

Historical data shows that over the past five decades, ROI on farmland investments have outperformed the CPI by 7.74 percent on average, while generating both attractive absolute and risk-adjusted returns and providing a hedge against inflation and economic downturns. It is this market, valued at $2.7 trillion, that FarmTogether is tapping into to open unparalleled access to institutional-quality farmland assets through a variety of products, including crowdfunding offerings, 1031 exchange, sole ownership bespoke offerings, and now, a new Sustainable Farmland Fund.

“Looking across real estate segments for the last 10 years, farmland has outperformed most segments,” wrote FarmTogether CEO and founding member Artem Milinchuk, in partnership with Catherine Bowlus, business strategy associate, FarmTogether, in a piece published by GAI News in February of this year. “According to the USDA’s reporting, farmland acreage has fallen by more than 1.5 percent in the last decade while land values and rents continue to rise.  With population growth continuing to drive demand for crops, we’d expect farmland returns from both appreciation and rental income to continue on an upward trajectory.”

Standing separate from FarmTogether’s crowdfunding platform, this fund will offer a portfolio of diversified, pre-selected farmland properties. The fund will invest in a range of farmland opportunities across both row and permanent crops including tree nuts, citrus, and apples across prime U.S. growing regions.

Broken down by crop, the allocations will look like:

Tree nuts: 50 percent
Tree fruit: 15 percent
Citrus: 10 percent
Row crops: 40 percent

And geographically the break down will be:

California: 40 percent
Washington and the Upper Midwest: 30 percent
Oregon: 20 percent
Arizona and Oklahoma: 10 percent

“As we look ahead to the next five years, our mission will remain the same,” Milinchuk told GAI News in March 2021, “to fund the future of sustainable agriculture by removing the barriers that have historically prevented investors from accessing this trillion dollar asset class.”

The minimum capital commitment to the fund will be set at $100,000 with a minimum hold period of two years. Net annualized returns will target 8-10 percent, and net annual target distribution is expected to fall between 4-6 percent. 

“We are pleased to offer investors access to a diversified fund of sustainable farmland investment properties through the FarmTogether Sustainable Farmland Fund,” said David Chan, COO and founding team member, FarmTogether. “Through this product, we hope to increase ease and accessibility for investors who prefer a hands-off diversified approach to real asset strategies and impact investments, such as sustainable farmland.”

In January of this year, FarmTogether partnered with Leading Harvest – a non-profit organization consisting of stakeholders across the agricultural value chain – companies that farm, own, and/or manage farmland, along with two environmental groups that together have created a new entity providing the first scalable, industry-wide universal sustainability standard that can be applied across all crops and geographies to address issues from climate change to biodiversity, and the resilience of cropland and communities.

As part of its commitment to Leading Harvest and universal sustainable standards, 100 percent of FarmTogether’s acres under management are currently certified with Leading Harvest, and  the operations of each property in FarmTogether’s Sustainable Farmland Fund will be verified sustainable through outcome-based evidence and third-party audits.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com. 

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