Investors are ready to invest in agriculture. Investing in agriculture. The main features, advantages and disadvantages of investing in agriculture

Hello! In this article we will talk about investing in agriculture.

Today you will learn:

• What are the features of investing in the agro-industrial complex of Russia;
• How to properly invest in agriculture;
• Where to find private entrepreneurs for capital investments in agriculture;
• How to evaluate the effectiveness of investments.

Characteristics of the agro-industrial complex of Russia

During a crisis, it is very important to choose a direction that does not depend on currency fluctuations, oil prices or the development of high technologies.

Needed in an industry that will always be in demand. One such industry in our country is agriculture. Think for yourself, people will always buy agricultural products, and this is a good guarantee of a stable income from investments.

In addition, the agro-industrial complex shows stable development in our country, despite the crisis situation. The growth in the value of natural food in the world also serves as a guarantee of the stability of income from investments in agriculture. This trend has a positive effect on the development of trade relations with foreign countries.

Another factor that you cannot help but draw your attention to is the lack of investment that the agro-industrial complex of Russia is currently suffering.

The main sources of funds for the development of the agro-industrial complex of the Russian Federation are:

• Public investment;
• Private investment;
• Foreign investment.

However, Russia's agriculture needs twice as much money as it receives now. This fact has a negative impact on the return on investment in the agricultural sector. And it is you who can correct this situation and get in return the confidence and high return on investment.

But before you invest in agriculture, you need to familiarize yourself with the factors that affect the effectiveness of investments in this area.

These include:

• Impossibility of making a quick profit. Remember the garden in the country: in order to get a crop, you need to dig up the beds in the spring, plant seeds, and harvest only closer to autumn. The same is true with investments in agriculture. Do not count on profit in the next six months or a year after investing;
• seasonality. Our country has a harsh climate, so it will not be possible to harvest all year round;
• Russia has a large number of unprofitable farms and agricultural land. There are several reasons for this: low investment in agriculture, long time from initial investment to profit, lack of funds to upgrade obsolete equipment, lack of agricultural professionals. Therefore, before investing in an enterprise, carefully read its financial documentation and the state of the economy as a whole.

Now consider the benefits of investing in the agro-industrial complex:

• tax incentives. Producers of agricultural products have the right to contribute only 12% to the state budget. In addition, agricultural enterprises are exempt from paying transport tax, and;
• If you decide to invest in agriculture, you can count on state support. The authorities actively support such investments by providing special conditions for attracting loans. As a rule, this benefit takes the form of payment by the state of a part of the loan amount taken for the development of the agro-industrial complex;
• The struggle of the state with imported products and support for exports. Our government has established gentle duties on the export of Russian products abroad. For example, if you want to sell meat to another state, you will only have to pay 15% of the customs value. But if they want to import the same products into our country, the duty will increase to 60%. Thus, the state is trying to support the domestic producer of agricultural products.
• As you know, real estate is always valuable.. Invest in land, resell it at the right moment and get your profit. Land can also act as collateral for a loan.
• The products of agricultural enterprises are bought by the state. In order to ensure state control of prices for social products, our state forms special funds. Thus, the state provides guaranteed sales to manufacturers of these products.

Investing in agriculture: a step by step guide

Here we bring cash to agriculture. It is important to remember that each case is unique and this is just a blueprint for how to invest in agribusiness.

Stage 1. Evaluation of your capabilities.

You need to evaluate the amount of money you have. In addition, keep in mind that your property is in the form of shares, securities and everything that can be sold in a short time. Don't forget to pay attention to your debts as well.

Keep in mind that only large-scale investments, which amount to millions, and in some industries even tens of millions, will bring you a stable and real income.

In the event that your savings are not enough, but you do not want to give up the idea of ​​investing in agriculture, you can apply to a bank for a loan for this purpose. As mentioned earlier, the state offers preferential lending terms for investors in the agro-industrial complex.

Stage 2. Safety first.

Do not invest all your funds at once, leave a small "stash" in case of unexpected expenses. It is best to keep reserve funds in the same currency in which you invested.

Stage 3. Define goals.

Why are you investing in agriculture? It would seem that the answer is obvious: to make a profit. But not everything is so simple.

To formulate a goal, answer two questions: “How much profit do I plan to receive?” and “How long will it take for me to receive this profit?”. When determining the payback period, remember that investing in agriculture is not a “quick fix”.

Stage 4. Acceptable risks.

Answer yourself the question: “Under what conditions will I stop further investment?”. For example, a company's assets fell by 50%. Are you ready to keep investing? Consider all possible risks.

Stage 5. Choose a strategy.

At this stage, we draw a line under all the previous ones.

Write down the following parameters clearly:

• The total amount of your investments;
• Types of assets that you plan to invest in agriculture;
• The period for which you deposit funds;
• The ratio of own and borrowed funds.

Stage 6. We choose an object for investment.

This is the most important step. Before investing in any farm, familiarize yourself with its financial condition. The technical equipment of the enterprise is also of great importance.

Stage 7. Conclusion of the contract.

We sign all the necessary papers and invest funds.

The best investment options

Let's return to the sixth stage and consider the most promising objects at the moment.

KFH and Partners

Relatively young company. One of the most prosperous farms in Russia, engaged in animal husbandry and growing crops. The company is located in the Tver region and is characterized by unusually high growth rates, which is facilitated by the use of high-tech equipment. The farm covers an area of ​​22 hectares of land.

At the moment, experts predict the development of the farm: an increase in the number of livestock, an increase in the area of ​​sowing, the construction of premises for household purposes.

The most attractive thing about the farm "KFH and Partners" is the low amount of the minimum investment. It is only 30 thousand rubles. The return on investment is 34%.

earth peace

Mir Zemli is a group of companies operating in various sectors of the economy, one of which is agriculture. The company was founded in 1991. It is noteworthy that the company offers to invest money in farms throughout the country.

At the same time, the company does not offer “semi-finished products”, its range includes only a turnkey business with a well-established sales market and the necessary equipment. Prices for farms depend on the area, equipment and location.

Geo Development

The company proposes to invest in land plots and other lands. "GeoDevelopment" offers land and ready-made farms in the Moscow region.

In addition, the company offers the following services:

• Legal advice on land registration issues;
• Assistance in farm management (at the initial stage);
• Assistance in choosing an investment project.

Own farm

One of the ways to invest in agriculture is to open your own farm.

We will now take a detailed look at how to do this:

First step- We determine the ownership of the site. It all depends on your financial capabilities. will require a large initial investment, but it will be a more profitable solution compared to renting later.

Second step- we determine the main purpose of the site: crop production (what crops) or animal husbandry (what animals).

Third step- Site selection.

Here we define the following parameters:

• Plot location. This parameter is determined by the purpose of the site, because if you want to grow crops, you will need a certain climate and soil quality;
• Land area;
• The degree of preparedness of the site. You can buy a ready-made farm, but it will cost much more.

Fourth step– registration of a farm. In this case, you can not, but lead as. This will affect the registration procedure and future tax and insurance fees.

In the case of opening your own farm, you will have to think about attracting investments in agriculture.

How to invest in private entrepreneurs

If you are not ready to open your own farm, you can invest in those who have decided to take this step. To become an investor of a private entrepreneur, you must apply to an investment fund. At the moment, there are quite a large number of investment funds specializing in investments in agriculture.

Such investment funds offer to invest both in large farms and start-up entrepreneurs. Separate public and private investment funds.

At the moment, the following sectors of private rural entrepreneurship are most popular among investors:

• Fishing;
• crop production;
• poultry farming;
• animal husbandry;
• Processing of agricultural products.

The second way is to search the Internet. But this method is quite risky.

Investment Appraisal Methodology

It's time to talk about how much return you can get from your investment. We will not provide statistics, but simply give you a formula with which you can calculate the return on investment for your project.

There she is:

Return on invested funds = (Total profit / Amount of investment) * 100%.

Pay special attention to this indicator if you have resorted to using borrowed funds. If the interest on the loan exceeds the repayment, then the project is considered unprofitable.

This is the simplest way to assess the effectiveness of investments, but it is sufficient to make a decision on further financing of the project.

1. When investing in agriculture, remember that this business is directly related to nature, and she is capricious. There are lean years, and the cattle get sick and die. Get ready for it.
2. Don't rush your profits. As already mentioned, agriculture takes time, so do not expect a return on invested capital earlier than in six months or a year.
3. Sometimes it is necessary to lower prices in order to make a profit. Agricultural produce has a short shelf life, and in harvest years, when supply exceeds demand, the price must be reduced to sell the produce rather than get rid of it. By the way, to get rid of unsold goods, you will also need money.
4. Be prepared for a long search for an insurance company, because they are reluctant to cooperate with a business whose success depends on the vagaries of nature.
5. Spend your time looking for a project for investment. A good investment object is the main criterion for success. To obtain reliable information about investment objects, you will have to analyze a large amount of information. Before investing your money, get acquainted with the performance of the enterprise. Assess the availability of the farm with equipment and qualified specialists.
6. You should always have a reserve of at least 25-30% of the investment, because nature is unpredictable.

Let's try to figure out what is attractive ?

We are able to solve a number of key tasks for the development of the economy:

• maintaining and stimulating overall economic growth
• maintenance of environmental safety
• reducing poverty in the long term.

To solve these problems in small-scale production can have a more significant impact than the financing of large state-owned monopoly enterprises. This is explained simply, about half a million small and private households provide almost a third of the world's population with food, but they do not have access to markets or infrastructure as their major state competitors. Stimulation and development in this direction can give a significant favorable economic effect.

Also stable and durable investment in agriculture able to create an impetus for the development of new innovative technologies. It is well known that the agriculture industry is closely intertwined with the chemical industry, the energy industry and many others.

The role of the state in regulating investments in agriculture is very high. Only the state is able to stimulate the flow of funding into this industry.

As everyone is well aware, agriculture is primarily focused on the production of food, given the growing population of the planet, the demand for food will only increase and will never disappear. This is a very, very strong argument for investors. Indeed, for an investor, the most important thing is that the object of his investment is constantly growing and making a profit.

Also investment in agriculture protected from some significant ones, such as fluctuations in prices for agricultural end products, volatility in demand and some others.

Another indisputable plus in favor of agricultural investment is the presence of untapped capacities in developing countries that have everything necessary for successful agricultural activity, however, do not engage in it due to lack of funding. Such markets are Russia, Ukraine, South American countries and others. Currently, emerging markets are the most attractive for those interested in agriculture.

Problems of investment in agriculture in Russia

Today, almost all agricultural organizations in Russia are, if not unprofitable, then working with a minimum level of profit. As we understand, this is clearly not enough to attract investment, no one wants to invest in unprofitable production. It should be understood that they invest money only in those areas that have an acceptable level of profitability.

The agriculture of the Russian Federation requires a radical modernization, but its own funds and state injections are not enough for this. That is why attracting foreign and domestic investment in agriculture is crucial for the future of this industry.

Today, the expert community believes that only enterprises that have undergone complete modernization and have reached a stable level of profitability and profitability have a chance to attract foreign investment. On the part of the state, it is necessary to finance the complete technical re-equipment of domestic farms, as well as to provide these farms with the opportunity to obtain agricultural loans on favorable terms. This is necessary in order for agricultural enterprises to get rid of accumulated credit debts and start working in plus.

The issue of profitable and promising investment is always relevant. And many companies, as well as private investors, constantly monitor the market, seeking to find alternative investment opportunities that can generate a stable cash flow. Among other worthy options, the agro-industrial complex, according to experts, definitely deserves attention. Therefore, it is worth exploring the opportunities that investment in agriculture opens up.

Analyzing this perspective, first of all, it is worth starting from the fact that natural food products will always be valued and in demand. Every year the population of the planet, including Russia, is increasing and the demand for quality products is increasing every year. Moreover, buyers are willing to pay more if the product is really natural. Therefore, there will be no problem of demand for the final product that the agro-industrial complex releases to the market. And this circumstance makes the agricultural sector quite tempting for those who intend to receive a stable profit.

Moreover, investments in agriculture significantly improve the situation in the country: the food supply is constantly increasing, there is a significant contribution to the development of the economy, and new jobs are being created.

If you look at the impact of investment in the agro-industrial complex, you can see that the development of agriculture contributes to progress in the field of innovative technologies. The thing is that investments in the agro-industrial complex imply inevitable costs for the purchase of products from the biochemical and engineering industries, as well as chemical production, the energy sector and other industry areas.

More effective development of farms often requires the active participation of the state.

How are things in Russia

The complexity of the development of agriculture in the Russian Federation is due to the fact that many of the existing farming enterprises in the country have a low level of income or suffer losses.

Compared to other countries that actively support the agrarian complex, Russia's investments in agriculture are much less global in nature. And although there are over 250 thousand farms in the country, it is not easy to find large investors who would agree to risk a certain part of their capital by investing it in the agro-industrial complex in the CIS.

If we turn to the assessment of the state of agriculture by UN experts, we can find out that, according to the latter, Russia is neither on the list of leaders in the development of the agricultural sector, nor among outsiders.

In fact, in order for the agricultural sector to set foot on the path of stable development, it needs 160 billion rubles a year. At the moment, agricultural producers themselves are able to invest only a quarter of this amount. It is for this reason that government policy in recent years has been focused on actively stimulating the agro-industrial complex.

Given the above, we can conclude that agriculture in the CIS has a real prospect of development and growth, subject to co-financing from the state. In turn, investors in agriculture are more and more willing to invest money, as the cost of food on an international scale is increasing and, consequently, the value of the agricultural sector is steadily increasing.

What is important to consider when investing in the agro-industrial complex

Before investing in agriculture, it is necessary to study the key factors that have a direct impact on the development prospects of this sector:

tax incentives. At the moment, the tax rate set by the government for agricultural producers is 12%, while representatives of other industries are forced to pay 24%. In fact, it is agriculture that is the only sector in the country for which there are no additional fees and tax incentives are allocated.

Import regulation. In Russia, there are quotas that are beneficial for agricultural producers. For example, the duty levied on the import of meat, within the existing quotas, will be equal to 15%, but when importing products into the country, the percentage increases significantly (30% beef, 60% pork and poultry).

Real perspective. At the moment, it makes sense to invest in the acquisition of farmland with the prospect of increasing value. In addition, the presence of a land plot makes it possible to obtain an inexpensive loan using the land as collateral.

Benefits of investment in agricultural production. Investments in agriculture open up the possibility for various companies to receive subsidies and allow them to enjoy preferential tax treatment. Moreover, due to the fact that grain prices have increased on the world market, Russian producers have every chance to successfully export agricultural products.

From the above, it follows that there are definitely chances for success when investing in the agro-industrial complex.

Is it worth starting a farm?

An integral part of any business plan is the calculation of potential risks. Therefore, before investing in agriculture, you should accurately determine all the difficulties associated with this business.

First of all, it is necessary to take into account the fact that many farms at the initial stage of their activity can operate successfully only with continuous attraction of investments. In the absence of these, the profitability of such a business model can be sadly low. Therefore, the search for investors must be taken into account.

It is worth remembering about such factors as the shortage of qualified specialists, seasonality and the increase in the cost of land. To make business in the agricultural sector as safe as possible, it is necessary to carry out risk insurance in agriculture.

Regarding the topic of the direction of activity, it is worth noting the following fact: on the experience of many farmers, it has been proven that farms that are engaged in several types of activities within the framework of the agro-industrial complex are more likely to receive a stable profit. But in this case, the question of funds again arises - investments in agriculture with such a strategy are inevitable, since it is extremely difficult to start several areas of activity from scratch at the same time. It is better to build them up gradually.

You can start with breeding cattle, ducks, chickens, geese. Horse breeding should not be ignored either. in the agricultural business, growing vegetables and fruits may turn out to be a good prospect. By the way, apiaries are also worthy of the attention of those who want to earn money.

If it is planned to develop a small farm, then the efforts of a family in which there are 3-4 able-bodied people will be enough. As for the land plot, here the state went to meet citizens who wish to raise the agricultural sector: according to the law of the Russian Federation, persons over the age of 18 have the right to receive their own land allotment. But at the same time, it is necessary to have an appropriate education or experience confirming the qualification of the applicant for land.

At the same time, the areas that need to be paid attention to in the first place are those that previously belonged to collective farms and, in principle, are subject to restoration. In this case, it will take much less effort to organize a business.

In conclusion, I would like to say that there is definitely a prospect for the successful development of farming in Russia. But the agro-industrial complex requires a competent approach and inevitably depends on investments. With both factors in place, there is every reason to expect a stable and even high income.