The migration of people and knowledge plays a vital role in every society’s permanent process of change. Migrants have shaped the world and have supported both their places of origin and destination. Uneducated migrants provide their labor force, and the knowledgeable, educated offer a different set of skills and knowledge. Today, with the use of new migrated techniques and technology the yield from the farms has increased resultant makes the farms in the destination more profitable.

The migrants in foreign lands always have an option to return to their homeland. Diaspora and returned migrants also help rural areas through investments, skills and technology transfers, know-how, and social networks. With a growing purchasing power, investors in India are now looking for innovative ideas to earn higher returns from their investments.

Farmlands -Future gold mine for Investors:

Investing in agricultural land or farmland has gained a lot of traction in the last couple of years. The purpose of investing in farmland may be different food for different people. Some investors prefer to keep farmland an asset where investors leverage the growing organic fruits and vegetable market to supplement their income.

The dilemma faced by the well-established immigrant who has embraced America or Europe and its values in his early youth and prospered that have eluded his Indian brethren left behind in the land of his birth is very well known. After the initial years spent pursuing professional success and material wealth, he faces a mid-life crisis. He conflicts with the reality of the life that he has created for himself and the pull of the Indian values with which he was brought up. Although the prospect of moving back to India appeals to him, he cannot give up his comfortable life in the foreign with its peaceful monotony and predictable routine. As part of this step, he likes to invest in India for various reasons ranging from emotional connect to purely business connect for investment reasons. There are several reasons for making investments in India. The enormous backlogs in green cards in the USA, global pandemic raging worldwide with no end in sight, emotional connection with the region and extended family, and the emotional guilt of giving back to the motherland are some of the reasons for the diaspora to invest. Several urban investors are investing in agricultural land, owing to the slump in urban reality and the promise of greater long-term returns. As India progresses forward, there will be a churning of jobs and skills. Some of the jobs and skills associated with it, which were a rage previously, will become redundant. Thus many are buying up farmlands for alternate professions. Some are opting for farmlands as fixed assets for the next generation. By 2050, the demand for food globally predicted by FAO is set to double, and due to a finite amount of farmland, experts believe that farmland prices are set to rise exponentially.

Several experts have agreed that farm investment is a safe option for parking one’s funds. The return on investment is generally higher than other investments and also lends safety to investors’ money. This is termed agro-realty, and the COVID-19 pandemic has set this market booming. Urban investors are now seriously on the lookout toward the returns potential of agricultural land, especially in the peripheral or suburban areas of big cities and state capitals. With real estate prices in most urban areas and cities hovering around historical highs, traditional property investors are looking at other viable options. One option is buying agricultural land, which may not weigh too heavily on your pocket. It can also be a source of tax-free income. Buying farmland on the city’s outskirts can also be a source of additional income if you grow exotic fruits and vegetables that can fetch higher prices if you export them. With soaring demand for exotic fruits and vegetables for exports and new technologies in farming has led to a new generation of tech-savvy farmers. These new generation farmers are better educated and informed than their previous generation, and they do not shun technological advances in farming. With the realty prices in urban areas and cities hitting the roof, purchasing property has become very expensive. And, even if you can purchase a small flat at an exorbitant price, the chances of further price appreciation are remote. So, it makes sense to buy a vast tract of farmland with the same price as a small flat and let the price appreciation take place.

Start-ups now offer to help you switch to farmland, from the paperwork to managing the plot and eventual sale. One of the significant advantages of farmland is that income earned from and gains made from selling the land are exempt from taxation. However, the rules regarding agricultural land vary from state to state. Like in Telangana, anybody can buy agricultural land irrespective of whether they are farmers or not, but in some states, only registered farmers or those from farming families can purchase such land. Additionally, there exists a ceiling on the amount of farmland that any individual can own, and it varies from state to state.

Buying Farmland – Avoiding and Mitigating Risks and Losses:

 

Prospective buyers should be very clear about how much return they expect and whether they will lease the land to someone or do farming by themselves, and whether they want just a farm or a farmhouse.

One should be aware that farming is not such a manageable activity, as advertised by many, and the rules and legal procedures regarding agricultural land vary from state to state. Investors should exercise due diligence while buying farmland and have a clear plan for managing the ground once they own it. Buying agricultural land can be a good investment for high net worth individuals and people with surplus income. Buying farmland is filled with some difficulties. One must ensure that the land has a clear title, as farmlands; if we survey the total area on the field has to appear as mentioned on records, some lands will be in disputes, need to get a clear Encumbrance Certificate and so on. One must visit the land and enquire with the local revenue, registration, and local body authorities to find out all details about the land and the antecedents of the seller. Going through all these processes will be time-consuming and tiresome for salaried individuals or self-employed professionals living in cities. People are not deterred by the COVID-induced lockdown and its resultant sluggish economy. The monetary value of agricultural land in Telangana villages has appreciated and doubled in the last two years.