As the farmland investment landscape evolves, landowners have found new ways to generate non-traditional income – often on the same land already in production.
Here are five ways farmland can be leveraged to enhance returns:
- Renewable Energy Leasing - Long-term leases for solar or wind installations can generate consistent, passive income.
- Agrivoltaics - In some regions, solar panels have been installed above crops or grazing areas, allowing for dual-use income from both food and energy production.
- Carbon Sequestration Programs - Farmers can earn payments by implementing soil practices that capture and store carbon. These carbon credits can be sold to corporations seeking to offset emissions, creating a new revenue stream with little up-front investment.
- Recreational leases - Leasing land for hunting, fishing, or private recreation can provide seasonal income with minimal impact on core operations.
- Offtake Agreements - For energy-producing farmland, these agreements lock in buyers – like utility companies – for future output. That means historically predictable, long-term cash flow with potentially higher premiums.
For farmland investors, we believe these alternative uses aren’t about changing the strategy – they’re about maximizing the value of the land and tapping into additional uncorrelated income sources.
If you’re an RIA looking to diversify your clients’ portfolios with real assets, let’s connect.