Agriculture is a vital activity sector, almost all that you eat is generated in this sector and that is not posed to change anytime soon. This strategic importance is recognized by all levels of government that heavily subsidize it in “developed countries” to ensure that it has a constant production and workforce, still in large part passed down from father to son. This makes it a sector with a high level of stability and with assets at its disposal (such as land and equipment) while being at the same time cash-intensive.
This is substantiated by the European Commission and European Investment Bank which highlighted the agricultural sector as having a high level of solidity (adjusted equity/total capital) and low level of default risk, therefore considering it a good portfolio investment. Read more about finance in agriculture in the Fi-Compass report “Financial needs in the agriculture and agri-food sectors in the European Union”
Keep in mind that it also presents specific risks just like any other. General characteristics of the sector include fluctuating profit margins and cash flow, animal diseases, climate, and weather-related fluctuations.
