How to get in­vest­ing down on the farm

The Daily Telegraph - Your Money - - MONEY -

Cows with Fit­bits, self­driv­ing trac­tors and ro­bot weed killers: tech­nol­ogy and ar­ti­fi­cial in­tel­li­gence are rev­o­lu­tion­is­ing agri­cul­ture – and pro­fes­sional in­vestors are buy­ing into com­pa­nies help­ing farm­ers to op­ti­mise their busi­nesses.

Over the long term, they be­lieve the ap­pli­ca­tion of tech­nol­ogy across the broader econ­omy rep­re­sents an enor­mous op­por­tu­nity for growth.

Agri­cul­tural tech­nol­ogy is a small niche in that over­all in­vest­ment ap­proach, but, as the world’s pop­u­la­tion con­tin­ues to grow, agri­cul­ture needs to keep pace, and tech­nol­ogy can help to in­crease pro­duc­tiv­ity and ef­fi­ciency.

Henry Boucher, man­ager of the Sarasin Food and Agri­cul­ture Op­por­tu­ni­ties fund, said while agri­cul­tural tech and mech­a­ni­sa­tion has changed enor­mously through his­tory, it still lags be­hind other sec­tors, and the com­pa­nies work­ing on chang­ing that have the po­ten­tial to do very well in the long run. Wage costs of farm work­ers, es­pe­cially in pick­ing soft fruits, are a sig­nif­i­cant ex­pense, he said. Us­ing me­chan­i­cal han­dlers – ro­bot pick­ers – could both limit that ex­pense and re­duce waste, an­other ma­jor prob­lem in the over­all food chain. The fund’s largest hold­ing is in the trac­tor com­pany p y John Deere, , which has been us­ing driv driver­less tech­nol­ogy tech­nolog in its trac­tors t for fo some time. t Although only on a small part of the over­all o busi­ness bus now, now the com­pany’s com tech for­ays will be­come in­creas­ingly im­por­tant, Mr Boucher said, and it re­cently in­vested in a new AI ven­ture.

The project, called “See and Spray”, uses fa­cial recog­ni­tion tech, sim­i­lar to that found in smart­phone cam­eras, to scan crops and spray pes­ti­cides and her­bi­cides only when it sees bugs or weeds, re­duc­ing costs and the en­vi­ron­men­tal im­pact.

Tim Day, co-man­ager of the Smith and Wil­liamson Ar­ti­fi­cial In­tel­li­gence fund, said the same tech­nol­ogy was also be­ing used on live­stock – scan­ning herds of cat­tle, for ex­am­ple, and de­tect­ing cows that look un­well.

“We are look­ing for ways to give our in­vestors ex­po­sure to the ap­pli­ca­tion of tech and AI across the broader econ­omy and agri­cul­ture is a re­ally in­ter­est­ing area,” he said. “All of this tech­nol­ogy is ap­plied to get more out of less, as we strug­gle to feed a grow­ing pop­u­la­tion. It’s go­ing to be­come more and more im­por­tant.”

Data anal­y­sis is also help­ing farm­ers to op­ti­mise the way they work, he said. The com­puter gi­ant Mi­crosoft is get­ting in on the game, work­ing with farm­ers in In­dia. The com­pany analy­ses weather pat­terns, help­ing to de­ter­mine the best time to plant crops. This, he said, aimed to boost yield and there­fore prof­its.

Rose­mary Ban­yard, who man­ages the San­ford DeLand Free Spirit Fund,

Want to back Great Bri­tish her­itage? You could buy into Worces­ter’s in­spi­ra­tion for The Archers. Just don’t put all your eggs in one farmer’s bas­ket.

Rush Farm, where the hit BBC ra­dio show was recorded in the Fifties (right), is of­fer­ing £1 “com­mu­nity shares” un­til Dec 10, ac­cept­ing in­vest­ments worth £100 to £100,000. Stock­wood Com­mu­nity Ben­e­fit So­ci­ety, set up to man­age the deal, tar­gets a 5pc div­i­dend.

Around 300 such schemes have raised £82m from 100,000 sup­port­ers since 2013, ac­cord­ing to in­vestor group My Com­mu­nity. They buy lo­cal as­sets such as pubs, green spa­ces, or in this case, an or­ganic farm with re­new­able en­ergy and ed­u­ca­tion schemes for young peo­ple.

But com­mu­nity in­vestors face risks ab­sent from tra­di­tional fund in­vest­ing. Phil Billing­ham, direc­tor at ad­vice firm Per­cep­tive Plan­ning, said: “All in­vest­ments are easy to get into – you need to look at how to get out at a fair price.”

In­vestors in Stock­wood can with­draw their shares, es­sen­tially ask­ing for their money back, but can only sell or trans­fer them to Stock­wood.

Mr Billing­ham said: “Pub­lic sec­ondary

mar­kets, like the Lon­don Stock Ex­change, are fairly traded; any­one can buy what’s on of­fer. But if you can only sell back to the com­pany you bought from, they dic­tate the price. Your need to sell is not their need to buy. You can’t trade this like a fund.”

Stock­wood es­ti­mated this year’s profit to be £179,000, ris­ing to £209,000 in owns a com­pany that pro­duces 2020, a pre-tax “Fit­bits” for cows. The com­pany, profit mar­gin of Avon Rub­ber, is a man­u­fac­turer with 58pc. But if in two prin­ci­pal busi­ness arms: one fi­nan­cial dif­fi­culty makes res­pi­ra­tory and pro­tec­tion it can sus­pend equip­ment for the mil­i­tary and the with­drawals or other makes milk­ing equip­ment cut share value. for dairy farms. Aside from mak­ing

Ac­cess to your equip­ment used in the milk­ing cash is sub­ject to process, the com­pany has branched 180 days’ no­tice out into mon­i­tors for cat­tle, where and pro­tec­tion is ap­pa­ra­tus re­sem­bling a Fitbit is scant; you have at­tached to a cow’s neck or leg. This no re­course to the then mon­i­tors the an­i­mal’s gen­eral Fi­nan­cial Ser­vices state of health, if it is lame, and Com­pen­sa­tion most im­por­tantly, if it is ready for Scheme, in­sem­i­na­tion. This, Ms Ban­yard said, which can means farm­ers are less likely to miss usu­ally pro­tect out on the an­i­mal’s cy­cle and can in­vest­ments up there­fore mit­i­gate the loss of money to £50,000, or in­curred when the milk yield or the the Fi­nan­cial num­ber of calves born drops. Om­buds­man Mr Boucher said that one Ser­vice, which Dutch nu­tri­tion com­pany, DSM, is can force re­dress pro­duc­ing a new form of cow feed of up to £150,000. un­der the project name “Clean Cow.”

Stock­wood The feed is de­signed to make the has paid a 5pc cows burp less, he said. Cows are div­i­dend to 300 huge pro­duc­ers of CO2, and cat­tle share­hold­ers, farm­ers of the fu­ture run the risk who in to­tal put of fac­ing fines and taxes be­cause of in £1m, in each laws on car­bon emis­sions. “Clean of the four years Cow” is de­signed to hedge against since launch. this po­ten­tial fi­nan­cial bur­den, said But a re­turn is Mr Boucher. not guar­an­teed, Re­tail in­vestors look­ing to tap into shares will never agritech may find it dif­fi­cult, as much in­crease in value, of the in­no­va­tion goes on in the and you may pri­vate com­pany space. get back less There are how­ever, a num­ber or noth­ing. of spe­cialised funds with

Mr Billing­ham ex­po­sure to agri­cul­ture and/ said: “If it’s OK if or tech­nol­ogy: Sarasin Food and you don’t get your Agri­cul­ture Op­por­tu­ni­ties, Smith money back, fine. & Wil­liamson Ar­ti­fi­cial In­tel­li­gence If it makes you i and Robe­coSAM Sus­tain­able feel good, take A Food Eq­ui­ties. the 5pc div­i­dend, Mr Boucher said: “Do not get and don’t worry car­ried away with the theme – there about the cap­i­tal, is an ex­cit­ing ben­e­fit in agritech, but as long as your there is no magic com­pany that will other in­vest­ments rev­o­lu­tionise farm­ing sit­ting on the

stock ex­change.”

Is the fu­ture of agri­cul­ture fer­tile ter­ri­tory for re­turns? Harry Bren­nan and Laura Miller sep­a­rate the wheat from the chaff

Adrian and Anne Par­sons are of­fer­ing a stake in their farm, above; a cow wear­ing a Fitbit-style mon­i­tor­ing de­vice, be­low

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