The Uruguayan farming industry is raising record funds on the securities market after the value of the country’s farmland saw an increase of ten-fold over the past decade.

 

To date in 2015, approximately $124 million in securities tied to agriculture have been issued – twice the amount issued last year, after financial trust, Fideicomiso Financiero Campos Sustentables sold $50 million in shares on September 18 to buy 10,000 hectares farmland over the next 18 months, and a second trust, Fideicomiso Financiero Tierras Irrigadas is planning to raise $100 million this year to fund the purchase of 10,000 hectares (24,700 acres) of farmland and the subsequent installation of irrigation.

 

In 2014, a hectare of farmland in the country sold for an average $3,934 – up 12% year on year and up ten-fold over the past decade, according to government data. This soaring in value of Uruguayan farmland contrasts with the decline in corn and soybean prices, which have fallen by half since 2012 despite the fact that Uruguay is one of the top ten global exporters of soy, rice, and beef.

 

Value-added projects that reach beyond basic agricultural production are the most interesting, according to Juan Montero, who manages US$1.9 billion at pension fund AFAP Sura in Montevideo, and although crop prices present a risk to some of the biggest investors in the country including pension funds, the country’s farmland is expected to retain its value.