The best investment advice these days may be to put your money where your mouth is. Food is garnering huge investments and providing big returns on capital.

The reason is simple: supply and demand. By the year 2050, there may be as many as 10 billion people on the planet. From now until then, demand for food is expected to spike 59% to 98%, according to the Harvard Business Review.

The Food and Agriculture Organization of the United Nations says, “Mankind’s future ability to feed itself is in jeopardy due to intensifying pressures on natural resources, mounting inequality and the fallout from a changing climate.”

Already, people are starving. One in eight Americans goes hungry every day, according to Feeding America. Globally, nearly 800 million people do not have enough food to eat, according to the World Food Programme.

Morality and market opportunities are prompting people such as Bill Gates and Howard Buffett, Warren’s oldest son, to take action; funds are aiming to invest in agricultural technologies that will increase crop yields; and a town in Denmark is setting itself up to be the self-proclaimed “Silicon Valley for agriculture.”

First, let’s take a look at what Buffett and Gates are up to. Buffett, through his foundation, is investing billions in farming education, Big Data, outreach and agricultural research. He’s trying to diminish food waste and lobby Congress for more effective food programs. Buffett believes there are enough farmers to produce enough food so people don’t go hungry, but that there’s a gap in access and information: People must have tools so they know first and foremost how they can get food. His foundation’s most recent annual report said, “We support a range of investments in agriculture, including research, conservation-based production practices, water resource management and advocacy to promote the best ideas that will have the broadest impact on the most vulnerable and under-resourced farmers. In the United States, we work to raise awareness about the scale and scope of hunger in our local communities and the critical role American farmers play in meeting the world’s growing demands for food while sustaining our natural resources through better production practices.”

It’s that last line to which the most attention should be paid. Gates echoes it with his activities, and it is where a lot of money is flowing. The Bill & Melinda Gates Foundation is heavily invested in smallholder farm programs, for everything from seeds that are resilient in droughts to genetic improvements for livestock. This all falls under the heading of improved systems and farming practices. “To achieve the goal of sustainable agricultural productivity, our strategy relies on strong partnerships with donor countries, multilateral institutions, private foundations and other organizations,” the Gates Foundation explains on its strategy overview for agricultural development.

This is where funds and the investment community come into play. For example, several years ago J.P. Morgan, the Gates Foundation and the Rockefeller Foundation teamed up for an African agricultural fund to improve the lives of small farmers. The deal was billed as the first of its kind because it split tranches into debt and equity, limited downside, and held out a superior targeted annual rate of return of 12.5%. By increasing education and access to markets, the 250,000 farmers engaged in the program were expected to increase their productivity and in turn their annual incomes; the upside works to everyone’s advantage. Even a small income increase makes the deal appealing: The average household income for a sub-Saharan farmer is less than $3,000 a year.

To be sure, lots of investment funds are forging paths in the food sector all on their own. In one example, the iSelect Fund focuses on early-stage agriculture companies that it says are poised to help push the next agricultural revolution forward. “From improvements in nutritional value, to better resource efficiency, to improved yield, to better cost controls, the agriculture industry is ripe for disruption,” St. Louis-based iSelect says.

First « 1 2 3 » Next