Unlocking the potential: investing in agricultural land in South Africa

As our population continues to rise, so will the demand for food and resources. Agricultural land investments therefore provide a tangible asset with intrinsic value.  

Thanks to its diverse climates and fertile soils, South Africa is a land conducive to various kinds of agriculture in different parts of the country. Seeff shines the spotlight on the specific advantages and considerations of agricultural land as a form of property investment in South Africa.

Is farming a good investment in South Africa?

Given that there is a global rise in demand for food, coupled with decreasing land supply and the historically strong performance of the agriculture sector, it’s unsurprising that an increasing number of investors are looking at farmland with renewed interest. Realistic estimates indicate that due to population growth, the volume of crops we need to grow by 2050 is approximately double the current global output.

There is also great variety within agricultural land. Would-be investors can choose to purchase irrigated or non-irrigated cropland, timberland, pastureland or land suited to be used for recreation or hunting. Once you own farmland, you can choose to farm it yourself, hire a farm manager or rent the land to a farmer. In the future, of course, you can sell the land for a profit.

There are various ways to produce passive income on farmland. Firstly, you can rent your land to tenants who wish to raise animals,  grow crops or operate a wine farm. As a second example, you can rent to renewable energy companies that need the space for solar panels or wind turbines.

Another reason why farmland can be a good investment opportunity is that it can bring you enjoyment. If you enjoy 4x4 driving or other outdoor pursuits, owning agricultural land can bring you immeasurable joy.

With technology and artificial intelligence playing an increasingly large role in farming, more and more is becoming possible in the world of agriculture. With automated harvesters, drones, autonomous tractors and other such devices taking care of menial and recurring tasks, farmers are free to focus on more critical functions. Thanks to technology, farmers can target specific areas with water, fertilisers and pesticides or even take care of individual ailing plants. This leads to higher crop yield and more value to be gleaned from your agricultural land. 

Which type of farming is most profitable?

In 2018, News24 reported that macadamia nuts are “hard to beat” as one of South Africa’s most lucrative crops. According to the article, a single macadamia tree can produce up to 32kg of nuts. More recently, Farmers Weekly reported that the macadamia industry has become known as a top investment, especially for farmers in Limpopo’s Lowveld, Mpumalanga and on KwaZulu-Natal’s south coast.

However, it was noted earlier in 2023 that yields on macadamia nuts have lowered, placing farmers in a four-year struggle. However, the article notes that with good management, farmers should be able to weather the storm. The secret to success, according to Farmer’s Weekly, lies in achieving the right yield through good management practices.

South Africa has a rich agricultural landscape and there are many other agricultural avenues that you can follow as the owner of farmland. Cattle, sheep, game, grains, sugar, citrus, wine and vegetable farming are all feasible options depending on where in South Africa you have chosen to farm. A great example of the calibre of farmland available is this 71Ha farm for sale in Riebeek Valley Rural.

If you are interested in buying agricultural land in South Africa, then Seeff is your ideal property partner. We have decades of experience in finding prospective farmers their ideal land. Contact us for more information.