Just 0.3 per cent of the $1.2 trillion held in Australian super is invested in agriculture. Australian fund managers typically claim that annual returns are too low and variable, and the assets too illiquid, to make buying farms worthwhile. VicSuper chief executive Michael Dundon, who has $175m of the fund’s $16bn invested in rural land and water, disagrees.
The Australian Farmland Index last month recorded annual returns for some of Australia’s biggest corporate owned farms at 24 per cent. “The fundamentals of globally scarce arable land and increasing food demand are so strong, and returns of 20 per cent in the current investment market hard to find; as an asset class, more super funds should be considering it,” Mr Dundon said.