This short summary of the major factors on investing in agriculture has been prepared by Lauralouise Duffy and Anric Blatt, co-portfolio managers of the Aqua Terra Fund, the Earth Wind & Fire Fund at Global Fund Exchange

1. AGRICULTURE
AGRI
The Challenge -­‐ How can we feed 9 billion people by 2050?
Limited resources, increasing demand and rising food prices provide compelling reasons to
invest in global agriculture. SIGIFICANT opportuni9es in commodi9es, farming & seed
technology and agribusiness.
Changing dietary paWerns
• Global popula9on > 9 billion by 2050. Agri output must grow 70% to meet increased
demand.
• Nearly all new demand from developing world, Agri output is predicted to double.
• Stock market capitaliza9on in developing na9ons predicted to grow fivefold over next
20 years, reaching over $80 trillion.
• Historic shiS in global dietary paherns as growing middle class shiSs to a more meat-­‐
centric / energy-­‐intensive diet
• Significant effect in developing countries, where meat consump9on is growing 3X faster
than developed world.
Commodity vola[lity
• High food prices nearing 2008 records, promp9ng U.N. warnings of pending food crisis
• Weather anomalies have devastated crops, leading to unprecedented jumps in wheat,
soybeans, corn, coffee, sugar and other basic commodi9es.
• Over the next decade, the FAO predicts grain prices will remain 15-­‐40% higher than
1997-­‐2006 levels.
Looming food supply/demand gap
• To meet projected food demand in 2030, the USDA warns we will need to add
addi9onal acreage equivalent to the total planted cropland in the United States, Brazil
and Argen9na in use today.
THE GREATEST OPPORTUNITY OF OUR LIFE TIME – WATER & NATURAL RESOURCES
• Despite years of advances, gains in agriculture yield per acre have slowed down to less
than 1% a year. New technologic and/or gene9c advancements are needed to
con9nue improving crop yields.
• Annual investment in agriculture must rise by 47% to $279 billion at a minimum, says
the FAO.
• Changing weather paherns due to climate change have impacted global harvests in
unpredictable ways. The Argen9ne droughts, Russian forest fires and Australian
flooding are just a few of many examples.
Compe[[on from biofuels
• New mandates for biofuels has scaled up compe99on for farmland and water. 240
million more acres will be needed for biofuel crops, represen9ng 50% of arable land in
N. America, and 6% of the global total.
• As a result of generous federal subsidies, 1 out of every 4 ears of harvested corn in the
U.S. -­‐ the world’s largest producer -­‐ winds up in an ethanol plant. U.S. farmland has
doubled in value over past decade.
• Fears of “agfla9on” as consumers face higher costs across all parts of the food
produc9on chain.
Land grab phenomenon
• In 2009, foreign investors purchased 111 million acres of farmland in the developing
world – a tenfold increase over ten years.
• Two-­‐thirds of land deals have been made in Africa. The biggest buyers? Sovereign
wealth funds from China, India & Middle Eastern countries looking for secure supplies.
THE BEST INVESTMENTS ARE WHEN NEEDS = OPPORTUNITIES