Alternative uses of farmland in Thailand

Investors in Thailand are increasingly looking at farm lands as an alternative to the traditional asset classes with the aim of spreading the risk and protecting themselves against inflation. But within the farmland itself, it is also important to diversify its use in order to achieve optimum capital returns and at the same time spread the risk.

As much as investors try to implement the most ideal management and investment model, they also have to consider each farm on an individual basis and decide its most ideal use accordingly. Factors such as location, climate and topography and soil quality have to be taken into consideration before the most optimum use for the land can be decided.

More and more farmland has continued to be converted into industrial as well as residential uses. Here are some of the most common alternative uses of farmland:

(1)Energy production

Renewable energy projects have become a necessity as a way of cutting down on the energy costs for farmers. In many cases renewable energy has become the main income stream making it a great way of diversifying the risk and at the same time deriving some income from the asset.

(2)Value addition

As a means of adding value to the primary use of the land, enterprises have been introduced progressively throughout the supply chain. These include fruit and vegetable processing and packaging or milk cooling and processing.

(3)Housing

As populations increase, pressure has forced landowners into converting some of their land into housing units. Struggling farmers have found refuge in the guaranteed income that housing units bring to the table.

Before deciding how to use the land, it is important to consider all the uses that the land can be put into. Where conventional farming is not the most appropriate use, alternative uses should be taken into consideration.

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