Fifty per cent of the agriculture asset managers in the UK are ready to offer Shariah-compliant agriculture investments, according to a study conducted by Shariyah Review Bureau.

Commenting on the potential, Alfred Evans, former CEO of Climate Change Capital (UK) Limited and current CEO of Islan Investments International, said: “I think there is a great opportunity for Shari’a compliant financial products focused on the agricultural value chain.”

“Agriculture is getting a lot of attention from investors for a variety of reasons, and is clearly a focus area for a lot of Middle East investors, the UAE states in particular.  So, yes, it is an interesting space because there is serious capital to be put to work that might be attracted by a Shari’a compliant product.”

Another finding was that several respondents believed that certifying their funds as Shari’a compliant was in alignment with their objective of administering ethical funds.

“We are interested in gaining access to the Shari’a compliant agriculture fund and investment market.  We have an ethically driven approach and it would seem there is good alignment” said Alix Burke, head of Communications at Agro-Ecological Investment Management.

With the rapid expansion of Islamic financial trends in the Middle East and spiking interest for agriculture investments attributable to Food Security in the region, many individuals and institutional investors now only seek to make investments in a product if it is Shari’a compliant, the study said.

 Mike Wellings, business development director of Agriculture Asset Management, said: “Specifically I see a demand for Shari’a compliance. It’s a market that has huge potential. We are aware of the potential for Shari’a compliant funds specifically related to agriculture, given the region’s requirement for food security going forward, especially from Saudi Arabia.”

For Islamic capital to be attracted by a nation, support from the central-regulatory authorities is the winning card. Due to UK’s close proximity to the Middle East, its openness to Islamic finance, and the neutrality of the English Law, which is also practiced in the Middle East, UK would definitely have more scope for Shari’a compliance of Ag-funds than other countries, and therefore, the ability to attract capital from the Gulf region and Islamic investors from around the world.

Witnessing that the commodity values have been falling recently, it should be highlighted that agriculture is a long-term investment and not a quick money making machine.

As legendary investor Jim Rogers rightly said: “Farming is going to be one of the best places to make money in the next 10 years, if you know what you are doing.”- TradeArabia News Service