Gates, Buffett Prefer Farmland To Crypto As Blockchain Gains Steam Across Agriculture


While Warren Buffett, the esteemed CEO of Berkshire Hathaway
BRK.B
, and Bill Gates, the founder of Microsoft
MSFT
, have both been vocal critics of cryptocurrency as an investment option, they have chosen to invest in farmland instead.

Both billionaires have shown an affinity for farmland investments, with Buffett purchasing his first farm in Nebraska for about $10,000 before high school and Gates owning over 269,000 tillable acres. Ironically, their investments coincide with the rapid adoption of blockchain technology in the agricultural industry, revolutionizing agricultural processes and potentially improving efficiency.

Major retailers like Walmart
WMT
, Unilever, and Carrefour currently use blockchain to track the origins of food products, greatly reducing the time it takes to trace a product’s source. As blockchain gains steam across agriculture, several companies have emerged as leaders in implementing the technology in the sector.

Some of the top companies using blockchain technology in agriculture in 2023 include AgriDigital, IBM Food Trust, AgriLedger, TE-FOOD, Ripe.IO, Demeter, AgriChain, Ambrosus, GrainChain, and Etherisc. These companies are leveraging blockchain technology to address various challenges in the agricultural sector, such as food safety, traceability, efficient transactions, crop insurance, and more.

Even if investors aren’t interested in buying cryptocurrency directly, they might want to consider stock options or angel investing in companies that offer exposure to the upside of blockchain technology.

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Why Farmland?

The reason behind the billionaires’ investments in farmland can be traced back to the famous quote by early 20th Century American humorist Will Rogers, who said: “Buy land. They ain’t making any more of the stuff.” Over the past 50 years, the average return on farmland, adjusted for inflation, has been around 6%.

This represents a stable investment for long-term investors, particularly those who can buy and hold vast amounts of land. The U.S. Department of Agriculture reports that 30% of U.S. farmland is owned by landlords who don’t farm themselves, suggesting that many investors share the same sentiment as Buffett and Gates.

While average investors may not have the deep pockets of billionaires to purchase vast amounts of farmland, they can still participate in farmland investing by buying farmland shares or agricultural mutual funds, exchange-traded funds, or real estate investment trusts. These investments can be purchased through brokerage or retirement accounts, and with some research, you can find one that meets your investment objectives.

Accredited investors also have the option to invest in farmland through investment platforms like AcreTrader, with minimum investments ranging from $10,000 to $20,000 for most offerings. Meanwhile, the rise of blockchain technology in the agricultural sector has further reinforced the value of farmland investments.

Blockchain Technology In Agriculture

Blockchain offers several benefits to the agricultural industry, such as supply chain transparency, traceability, smart contracts, payment systems, and quality control.

Blockchain technology can significantly improve the food supply chain by providing transparency and traceability. This enables consumers to trace the origins of their food, ensuring that the products are genuine, safe, and sustainably produced. In fact, a recent report published in Heliyon states, “Food industries can minimize food frauds by real-time detection and relating outbreaks to their definite cause. In this way, the distributed ledger technique like blockchain technology permits more determined and feasible control of food safety and quality.”

Blockchain can also simplify transaction processes and increase efficiencies for small-scale farmers and crop growers, particularly in low-income areas. Farmers can establish trust among market participants and ensure fair prices for their produce by providing access to blockchain-based platforms for trading agricultural products. The Helivon report explains, “The ground-level participants (farmers), the food processing industry, and the supply chain management system can all move to a single track using a blockchain platform.”

Smart contracts, powered by blockchain technology, can assist farmers in insuring their crops and filing claims with insurance companies. By automating the claims process, blockchain can make insurance more accessible and efficient for farmers, protecting them against unpredictable weather events and crop losses.

Blockchain technology enables farmers and producers to track their products throughout the supply chain. This provides valuable information about when and how a product was harvested, who produced it, and its journey from farm to table. The unalterable nature of the information recorded on the blockchain ensures its credibility and resistance to forgery.

The preference of billionaires like Buffett and Gates for farmland investments over cryptocurrencies highlights the potential of this asset class in the long term. With the growing adoption of blockchain technology in the agricultural sector, farmland investments offer promising opportunities for those looking to diversify their portfolios and invest in a stable, growing market. By understanding the various applications of blockchain in agriculture and exploring different investment options, you can capitalize on this trend and potentially reap the benefits of a thriving industry.

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