Strategic Investment Alternatives for Agricultural Producers: Pathways to Wealth Accumulation

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Alternative Investments for Farmers 0503241


Farmers often are invested heavily in fixed assets (overhead) such as farmland and a harmonized set of equipment and buildings dedicated to the production of commodities such as corn, wheat, or milk. These commodities are the outputs from the inputs that are owned or controlled by the farm operator for the purpose of producing income.

Over a lifetime every household participates in wealth accumulation. Wealth accumulation consists of a set of activities over time aimed at producing household income or wealth. While most farmers engage in commodity production to generate current household income, the household often accumulates substantial wealth through farmland appreciation over a lifetime. There are several alternative strategies available for wealth accumulation through additional investment, either on-farm or off-farm. This article discusses these strategic alternatives and provides some evaluation of their characteristics.

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