Pension funds join forces to invest in farmland
Most farmland is owned by family farmers, giving institutional investors huge scope for buying up individual properties to form larger operations.
Institutional investors say that by working together they have a much better chance of being successful in terms of social responsibility as well as economic returns.
But some agricultural experts questioned the benefits.
"It's not absolutely clear to me that the simple fact that just a few of them come together is going to produce a better overall result," said David Hallam, director of trade and markets at the United Nations food agency (FAO).
"Unless the nature of the actual investments changes substantially, then I don't see the fact that a few companies get together would necessarily improve things," he added.
Institutional investors have generally focused on regions that are net exporters of food including North America, Australia, South America and Central and Eastern Europe.
"We like to be a in a situation where we're not taking food from the local market, where we are not taking food away from its natural value chain for speculation purposes, (where) on the contrary we contribute to increasing food production," said Berry Polmann, executive director at Adveq.
"While doing so, we don't want to undercut local farmers by producing more at lower costs, eroding their competitive power and wiping them out. That's one of the reasons why Africa for us is very difficult."
Adveq's group is looking for farmland assets in North America, Central and Eastern Europe, Latin America and Oceania.
Through partnering, institutional investors aim to become more efficient and share knowledge.
"We prefer to go with other institutional investors," said Ibrahim Abdulkhaliq, portfolio manager, alternative investments at MASIC, a Saudi Arabian institutional family office.
Abdulkhaliq cited two reasons for the trend - more difficult governance and due diligence in farmland and the ability to reduce costs, making investments more viable.