Investors eye global ag sector for boost

By Carey Gillam

NEW YORK (Reuters) - A hunt by investors for a bright spot in the global economic downturn has led to the farm.

Those eyeing investments within the global agricultural sector say growing global demand for food production, biofuels and agriculture-related industrial products is boosting agriculture as a part of many portfolios.

Institutional investors are already well established in commodities markets, but high levels of volatility have added to risk and left investors searching for seemingly safer bets.

"Physical agriculture's assets are the new focus in longer term investments as institutional investors explore opportunities in everything from raw land to grain elevators to food processing plants," said Peter Meyer, an agricultural products specialist at J.P. Morgan Chase where he is executive director.

Meyer said heightened concerns about food security in the face of a growing world population and the need for more arable land and improved technology are driving factors.

That interest will be the focus of a "Global AgInvesting" conference, scheduled for Monday and Tuesday in New York. Sessions are aimed at pension funds, endowments, private equity and hedge funds and corporate agricultural-related companies seeking to leverage the structural changes occurring in global agribusiness.

The conference comes after the Paris-based Organization for Economic Cooperation and Development (OECD) said in a June 17 report that even amid the global financial crisis and economic downturn in all sectors of the economy, agriculture was faring well due to relatively income-inelastic demand for food.

Amid a rapidly growing world population, insufficient food supply and distribution systems and political unrest in many developing countries, the number of hungry people in the world has swelled.