What are Permanent Crops?

July 5, 2021

Anyone planning to invest in agriculture will find it useful to become familiar with some basic terminology. Of course, it’s always prudent to learn about a new sector before you add it to your holdings.

For example, you will hear farmers as well as investors discussing permanent crops. But what does the word “permanent” mean here? People don’t often think of plant life being permanent. You cultivate crops, harvest and them eat them. That’s about as far from permanent as you can get. Permanent here means that the land continues to produce year after year, without the farmer needing to replant fields after each harvest.

Permanent crops are an important part of the economy and of the global supply chain. You can get an idea of their significance when you learn that the current total market value of permanent cropland is $5,160,947,705, according to the latest figures available from the National Council of Real Estate Investment Fiduciaries.

For context, the NCREIF only tracks and lists properties in its Farmland Index that produce income, whether a joint venture or wholly owned.

How Much of Agriculture Is Devoted to Permanent Cropland?

Approximately 0.29517 % of the total land area in the United States is designated as permanent cropland, according to data maintained by the World Bank and reported by Trading Economics.

Permanent crops favored by investors include walnuts, almonds, pecans and other tree nuts, grapes for wine production, and fruits such as oranges, apples and blueberries.

What Counts as a Permanent Crop?

Eurostat defines them like this: “Permanent crops are usually ligneous crops, meaning trees or shrubs, not grown in rotation, but occupying the soil and yielding harvests for several (usually more than five) consecutive years.”

Unlike land where farmers cultivate crops, harvest them each year and then replant the land, permanent crops stay around for much longer durations.

You plant or sow permanent crops in the fields just one time, and then you can harvest them each year after, without needing to plant more of them.

Orchards, shrubs that produce flowers and vines are all producers of permanent crops. Keep in mind that another term for permanent cropland is perennials.

Examples of Permanent Crop Commodities You Are Surely Familiar With

You’ve likely consumed or used your fair share of products coming from permanent cropland farmers. Examples of crops in this category include:

  • Almonds
  • Pistachios
  • Cocoa
  • Coffee
  • Rubber

As you can see, some trees appear in this list of permanent crops because of the products we get, from nuts to snack on and rubber to turn into automobile tires. Not all trees are considered permanent cropland, though. Trees raised for timber or to make paper are not in this category.

Consulting With Experts About Your Permanent Crop Investments

If you’re ready to make a change and start investing in agriculture, chances are good that you will be presented with opportunities involving permanent agriculture. Instead of going it alone, though, you can work with the experts at FarmFundr.

Our team is well versed in all things farming and agriculture and work diligently to bring the best permanent crop investments to their network of investors. To learn more about permanent crops or any other aspect of farm investing, please visit www.FarmFundr.com