AFRICANEWSWIRE.NET (June, 27 2012) In a recent Penny Stock Detectives gh-farmland-prices-mean-strong-agricultural-commodity-prices">article, editor Danny Esposito points out that there is a sector of the housing market that is actually growing, making it the envy of the real estate market. Farmland values across the U.S., Esposito notes, were up on average about 20% in 2011, when compared to 2010’s level. In the first quarter of 2012, farmland prices rose another five percent, which is a reflection of demand for agricultural commodities.
“From 2001 to 2011, the price of farmland in the UK has tripled due to the demand for agricultural commodities,” explains Esposito. “In Canada, since 2006, farmland prices have risen by an average of eight percent per year. In the Province of Saskatchewan, which is home to 40% of all of the farmland in Canada, farmland prices are rising by 11% per year.”
In Australia, farmland prices dropped in 2009 and 2010 due to a terrible drought. Since then, farmland prices have more than recovered due to the demand for agricultural commodities, notes Esposito.
Australia has noticed, as well, that there is a record amount of foreign ownership of its farmland. Over the last 20 years, foreign ownership of Australia’s farmland has doubled, with most of the new ownership originating from China and India.
Not only are there seven billion people on the planet, but also the staggering economic growth that is taking place in Asia has increased the demand for agricultural commodities, which has led to steady price increases on farmland over the last decade, believes Esposito.
The ironic part is that, as these Asian countries grow, they build more cities. In order to build more cities, they need to sacrifice farmland.
The Indian government estimates that, between 2006 and 2011, India lost approximately 91,000 hectares of farmland to industrialization. In China, it is estimated that, between 1996 and 2006, 6.5% of all of its farmland was lost to industrialization, notes Esposito.
In order to make up the difference, China and India need to import their agricultural commodities. China and India are demanding record amounts of crops from Australia, Canada, and the U.S., which is why farmland prices steadily rise, Esposito concludes.
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