It may seem an unlikely strategy but it is proving to be effective in these straitened economic times, according to Pierre Maguerit. He acts as a middleman by putting farmers and investors in touch.
“It’s very simple,” he said. “You can buy one or more cows, which are then rented to professional breeders – your herd will increase as the years go by.”
As the herd grows, investors can either keep the new-borns, or sell them on for a profit. For many investors who have looked at the financial markets with fear, following the herd now makes perfect sense. A savings account gives a return of about 1%; cows on the other hand can yield up to 7% on the initial investment.
Parisian Jean Claude Janes, a retired executive in the car industry, bought his first cow in 1980. He now has more than 60 cows and every year milks the benefit in the form of a hefty cheque for about €5,000-6,000.
“It fluctuates because the yield isn’t fixed,” he said. “It’s not like a bank’s savings account, but I would say that in the last 15 years it has been an average of 5.5%.
Farmers are also enjoying the new trend. Richard Durand owns nearly 100 cows at his farm in southeast France, but has decided to rent out 37 of them. He has used the extra money to invest in his business and has bought new equipment to produce butter, cream and yogurt.
“This has allowed us to invest less money in the animals for our production, but to concentrate more on the infrastructure and our equipment in order to produce what we want to produce,” he said.
Interest in rural investment has surged in recent months because it’s viewed as relatively safe in a tough economic climate. The cows, for instance, are insured against diseases and even theft, and when they die they have already been naturally replaced by their calves, so the initial investment is not only safe, it’s also expanding.
If it works in France, FoodBev.com wonders if it might be an idea that will spread to other countries? In the meantime, it certainly gives new life and meaning to the business strategy of cash cows.
Source: Sky News
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