Want to invest in agricultural land? Here is what you ought to know

livemint.com:

Mint interviewed a few people about their experiences with buying agricultural land. Industry experts also weighed in on the factors to consider before such an investment. What to look out for? Shital Jain, a resident of Itarsi in Madhya Pradesh, is optimistic about investments in agricultural land, citing its higher potential for appreciation in value.

The 34-year-old, who holds an MBA finance degree from Symbiosis International University and has worked five years as a research analyst tracking equity and commodities in Mumbai, invested in four acres of agricultural land three years ago. Jain says the price of his land has since doubled. He has now leased it to a few farmers and this yields around 4-5% of the investment value per annum.

Jain, who joined his father’s commodity trading business a few years ago, is very satisfied with his investment, unlike his residential property in Mumbai, prices of which have remained stagnant for a long time now. On top of that, the maintenance costs are higher. Jain emphasizes the importance of “arability, proper road connectivity, irrigation facilities, and access to communication" before investing in farm land.

In terms of managing it, he highlights the necessity of fencing along its boundaries, and ensuring access to water through tube wells. Note that Jain’s involvement in the agricultural business made it relatively easier for him to find suitable land and farmers for leasing. Ayush Gaur, a BSc agriculture graduate from Udaipur, Rajasthan, had a different experience on both occasions that he purchased land for his dairy business.