Plaas Media recently attended the launch of yet another addition to the Impact Farming platform, a financial services product of Fedgroup. As part of the launch, the team toured the CAN-Agri facility, where lettuce is produced using a hydroponic system. CAN-Agri is also one of the new partners of Impact Farming.

Under its Impact Farming venture, Fedgroup launched the world’s first agricultural investment suite of its kind in August 2018. Initially, consumers could make a once-off investment in a blueberry bush, beehive, or solar panel, and earn income from a portion of the sale of the harvest.

Now Fedgroup has released an opportunity for investors to invest in an initial portion of 500 lettuce stacks at the CAN-Agri sustainable farm in Pretoria. This is hot on the heels of moringa and macadamia trees, being made available on its app. The app can be downloaded here.

A lucrative investment in leaves

Investing in a lettuce stack will cost R7 000 and the returns are expected to yield an estimated 14% on average per year, over the seven-year investment term. Returns are calculated on an internal rate of return across the life cycle of the asset.

The lettuce is planted in vertical stacks that span six meters with 82 plants in each stack. Water is recycled and repurposed and care has been taken to minimise the operation’s carbon footprint.

Investing in a lettuce stack will cost R7 000 and the returns are expected to yield an estimated 14% on average per year, over the seven-year investment term.

“The business has been structured to be profitable and sustainable,” said Grant Field, Fedgroup chief executive officer (CEO). “Since our launch three years ago, our average internal rate of return across our three assets has been consistent,” said Grant Field, CEO, Fedgroup. This is a trend that he is confident will continue.

According to Field, the success of the returns on the Impact Farming platform have been because of the business’ hands-on approach to each asset.

lettuce
The CAN-Agri facility, where lettuce is produced using a hydroponic system.

There is always risk in agriculture

“We have designed a comprehensive process that includes vigorous due diligence on each asset to ensure that it meets our requirements as a stable investment,” said Field. “We have learnt a lot along the way and have refined the model to now be able to scale even more – we have paid our school fees”.

He adds that this is agricultural produce and that there are risks associated, as with any investment. However, the business works closely with its partners to mitigate these risks.

“Last year we had two black swan events where frost affected a large portion of the blueberry farm. But we were able to recover and still pay out a return to our investors,” said Field. – Compiled by Ursula Human, AgriOrbit