Tag Archives: green
Plantation Land Sales Interest Resumes
Posted Sun Jun 30, 2013 PHOTO: John Hewitt says interest in timber plantation land sales is returning (Jack Hewitt) AUDIO: John Hewitt at Harcourts Rural is seeing a revival of interest in plantation land (ABC Rural) MAP: Launceston 7250 The failure of three managed investment schemes with hardwood plantations in Tasmania gutted the market for timbered land in the state. But confidence is starting to return to the sector, as woodchip exports resume. That’s the view of John Hewitt, a director of the rural real estate firm, Harcourts Rural. He says another positive factor is the Macquarie Group’s continued interest in securing plantation assets from Forest Enterprises and Gunns MIS schemes. Macquarie has been looking to take over the plantation assets of Gunns and resolve issues around ownership and liability for the schemes. And John Hewitt says Macquarie is offering landholders with Gunns plantation leases between $20 and $50 per hectare to terminate the forestry rights. “The land owners will get their land back unencumbered and they’ll own the trees,” he said. “It’s up to the land owners to assess what’s in their best interests. “It’s a tangled web as we all understand it “But because there’s a bit more confidence in the industry with some sales going ahead, when we get some clarity about which way the land will be sold, whether it goes to Macquarie or the MIS is carried on and some land owners opt out of it, or some opt in, or they’re all in or all out, it will be clearer. “But either way, there will be some land that becomes unencumbered and land owners will own their trees. “There will be interest in that land. “We’d be interested in putting together a list of those properties so we could market them to the people who are coming to us.” Continue reading
Sector ‘Can Be Part Of Climate Change Solution’
BY NEELS BLOM, JULY 01 2013 Agriculture is a major contributor of greenhouse gases, with 15% emissions. Picture: THINKSTOCK THE South African social enterprise Food & Trees for Africa’s crop of choice for the mitigation of anthropogenic climate change is an unlikely member of the bamboo family, but there may be more to this grass species than meets the eye — and to the arguments made in favour of carbon sequestration with which alternative crops are credited. Climate change may not be the only constraint affecting sustainability in agriculture, but adaptation in farming may be highly effective in mitigating anthropogenic global warming now generally accepted to be the consequence of the emission of greenhouse gases, chiefly carbon-rich gases released by combustion. While agriculture is the sector most vulnerable to climate change, it is also a major contributor of greenhouse gases, accounting for about 15% of emissions, or as much as 30% when considering land-use change, including deforestation. However, agriculture can still be part of the solution, says a report on a concept known as climate-smart agriculture. One proposed adaptation is the cultivation of crops that act as carbon sinks by absorbing greenhouse gases from the atmosphere, while simultaneously addressing the social, economic and developmental constraints to sustainability. Food & Trees for Africa launched its Bamboo for Africa programme in 2010. The programme is now internationally accredited through the Verified Carbon Standard as a verified emission reduction programme. The organisation also calls the programme a greening, climate change response offering carbon offsets and which includes corporate social investment, enterprise development and black economic empowerment. The bamboo project — climate smart in that it encompasses what its proponents call a triple win — includes cultivation techniques such as mulching, intercropping, zero tillage, agro-forestry, improved grazing and improved water management. By increasing the soil’s organic content, the wins are greater water-holding capacity, crops that are resilient to climate change and carbon storage. According to the climate smart report, projects of this nature are under way in Burkina Faso, Ethiopia, Kenya, Malawi and Niger, as well as in Yemen, China, Brazil and Mexico. But the critics of carbon sequestration programmes in agriculture say the credits generated by farmers and sold to emitters in developed economies generate a false belief that they have offset their polluting activities. They say also that the idea of leveraging finance for African agriculture is misleading and that they are more likely to threaten farmers’ livelihoods. The Institute for Agriculture and Trade Policy says in a report by Steve Suppan that there is no money for agriculture in Africa from carbon offsets. “The financial structure of climate smart agriculture is built on evaporating carbon markets. Carbon markets are in collapse, and projects will have inadequate finance.” The reports says it will take several years of project implementation before any carbon credits can be sold, and that offset projects will struggle to find investors. The responsibility for pre-financing these projects has so far fallen to governments, with the result that they have become a diversion of public funds that are needed to tackle climate change. Carbon prices have fallen to a low of less than €3 per ton, which is too low to persuade emitters to switch to greener energy. For African farmers the meagre profit thus generated cannot recoup the public finance investment, let alone leverage real funds, critics say. A much-vaunted World Bank pilot project in Kenya, for instance, is likely to generate between $5 and $1 per year per farmer. All that happens is that taxpayers will prop up failing carbon markets for the benefit of speculators. Continue reading
Active vs Passive: The Pros And Cons
When it comes to exposure to the agriculture sector, could exchange traded products be the better choice? By Laura Mossman | Published Jul 01, 2013 The appeal of the agriculture sector for investors is easy to understand – long-term drivers of growth and short-term opportunities make it a compelling option. Indeed, with the United Nations anticipating the global population could reach 10bn by 2100, the demand for food coupled with pressure on the amount of farmland look set to drive up the price of agricultural commodities and necessitate more investment in technology to improve efficiency. While the fundamentals are convincing, the best way for an investor to access agriculture is not as clear-cut. From opting to take a direct bet on an individual stock through to investing in a passive or active fund, the choice can be bewildering. Neil Jamieson, head of UK sales at ETF Securities, says the best way to navigate the options is to examine the motivation for the investment. “Investors need to consider whether they are investing for diversification and optimisation of returns in their broader portfolio or… to tilt their equity exposure towards a particular theme,” he says. “While equities are geared to the business cycle and driven up and down by underlying sentiment, agricultural commodities do not, on the whole, behave like that.” The key benefits of going for an exchange traded product are fundamentally the same as those that underpin passive investments in general: they are available at a much lower cost, they tend to perform in line with the average actively managed fund over the longer term and there is a wide choice. “For broad exposure, a basket of, say, 30 commodities will generally rise a little faster than the MSCI World index, but also fall a little faster, too,” Mr Jamieson adds. “Equally, agricultural commodities also afford some tactical options.” In the actively managed fund space, there are a number of options for investors who are willing to take on the risk and reward associated with the equity market. “Within [equities], agriculture looks attractive,” says Mike Horseman, managing director at investment specialist Cockburn Lucas. “We tend to use active managers, utilising the good managers there are in that space, then perhaps blending in some passive building blocks.” Mr Horseman cites the Sarasin AgriSar and Baring Global Agriculture funds as the leaders in the sector, offering good performance and diversification. The former has secured an annualised return of 5.1 per cent since it launched in 2008, while the latter has returned 7.8 per cent on an annualised basis in the past three years. Other strong offerings include the Allianz RCM Global Agriculture Trends, First State Global Agribusiness, Eclectica Agriculture and JPMorgan Natural Resources funds. Henry Boucher, manager of the Sarasin AgriSar fund, suggests seeking to understand the definition of agriculture each manager is working to. “For a lot of funds, the focus is large-cap North American agriculture stocks,” he says. “Instead, we look not only at the production of food in the developed world, but also the consumption of food in the emerging markets. It provides a wider spectrum of choice, and goes further than simply looking at how different stocks are going to perform in line with different commodity prices.” Overall, much of the choice boils down to each investor’s views on active versus passive funds, plus their desire to gain exposure directly to commodities or via a broader equity portfolio. The passive options stand up well, but a number of outstanding active managers in the space have proved their ability to add alpha over the long term. Laura Mossman is a freelance journalist Continue reading
