International investment funds have in recent years made strong investments in Portugal in the so-called agribusiness. We are talking about investments of many millions of euros, in the acquisition of land, especially in olive groves, almond trees, dried fruits, small fruits, avocados.
The large size of farms and their respective plots are a decisive factor for investing in this type of business, with greater preponderance in Alentejo and Beira Interior. The North and Center regions have a huge interest in the fertility and productivity of their soils, as well as the high availability of water for irrigation.
But they suffer from an enormous limitation, the small size of the farms, which prevents them from reaching high levels of economic and financial profitability of the capital invested. On the other hand, the Algarve is very interesting due to the precocity of its productions, but it has a strong limitation due to the reduced amount of water available for irrigation.
These investment funds prefer vertical projects linked to agri-food, land purchase, production, industrialization and marketing with a greater focus on international markets.
Portuguese agricultural and agri-food production continues to break records in exports, eg fruit and vegetables, olive oil, wine, etc., to which it has contributed, in my opinion, this type of investor.
The sustainability of agricultural production, in the present and in the future, is very dependent on the quality of the management and technical team, the size of the farm, the vertical integration of the business and the dispersion of exports across international markets.
A public policy that promotes the increase in agricultural holdings and the irrigable surface will be more attractive for the entry of foreign capital into agriculture in Portugal. With these foreign investments, Portugal can eliminate, in 5 years, the structural food deficit, which today reaches a negative value above 3000 million euros
The improvement of the land structure requires the Government to implement a bank credit line with mutual guarantee of 125 million euros per year for the payment of defaults. This line of credit will leverage loans worth 1875 million per year.
In this way, owners of rural buildings that are at least five years old may be eligible to acquire neighboring rural buildings. The bank credit line would be for 30 years with a seven-year grace period.
The promotion of irrigation in the North and Center regions would involve the use of water from the respective watersheds through the construction of ponds, small and medium-sized dams, as well as the installation of irrigation systems with water under pressure from stored water to be used in the summer.
These policies were to be financed by the State Budget and the European Investment Bank, given that PEPAC and PRR financial funds were not allocated to implement these public policies.
The author writes according to the new spelling agreement