How infrastructure spending boosts the profitability of the agriculture sector
Transportation infrastructure is one of the most important drivers of agricultural growth.
If logistics providers cannot get perishable fruit, meat, and dairy products to grocery store shelves on time, agricultural profits suffer. Wholesalers purchase less, consumers pay more at the checkout counter, and farmers struggle to make ends meet.
But when the path from farm to table is clear and efficient, everyone wins. Farmers grow more and earn more selling produce to distributors, who enjoy better cash flow on their end thanks to an obstacle-free supply chain.
As an agricultural investor, you need to do more than just find prime farmland. You need to find prime farmland with sufficient transport infrastructure to enable sustainable long-term growth.
An Introduction to Colombia’s 4G Transport Infrastructure
While the rest of the world associates “4G” with telecommunications technology, the term has a different meaning in Colombia. For decades, the Colombian government has consistently developed its transportation infrastructure in generation-spanning increments. The latest project to achieve legislative approval is the fourth of its kind – the Fourth Generation (4G) Road Infrastructure Program.
This program includes 40 highway projects spanning 4,300 miles of new roads connecting some of Colombia’s most valuable farmland regions with its biggest coastal ports. The project includes more than 750 bridges and over 40 tunnels, some of which are already completed and open.
Like many large-scale national initiatives, Colombia’s 4G transport infrastructure program was on hold during the worst days of the COVID-19 pandemic. In March 2021, one year after the first global lockdowns took place, the government officially re-commenced road work throughout the country. The government has also started planning its post-pandemic 5G infrastructure plan, which will include new highways, canals, and airports.
Colombia is the largest South American country to feature dual coastlines along the Pacific and Atlantic oceans, giving it a strategic advantage when it comes to shipping goods directly to both coasts of the United States and Europe and bypassing the time and expense of the Panama Canal. But this also means its transport infrastructure is vital to the nation’s agricultural and economic success. The better connected Colombia’s fertile farmland regions are with its major ports, the greater the country’s economic potential becomes. And as you’ll see from some of the following examples, the potential can only be described as significant.
Transport Infrastructure Projects Currently Underway in Colombia
One of the biggest projects of Colombia’s 4G infrastructure investment is Pacifico, consisting of three cross-country highways scheduled to connect by 2022:
- Pacifico 1 is the most ambitious and complex highway project in the country. It starts in Southwest Antioquia and connects the municipalities of Amaga, Venecia, Caldas, and Titiribi.
- Pacifico 2 was inaugurated in October 2021. It connects two port developments in the Gulf of Uraba with the department of Antioquia, enabling transit between Colombia’s famed Coffee region and the South of the country.
- Pacifico 3 connects 18 municipalities throughout Antioquia, Caldas, and Risaralda. It includes the Tesalia tunnel, the longest vehicle tunnel in Colombia’s Coffee Axis. Once completed, it will connect the country’s high-volume port at Buenaventura with the city of Medellín, crossing through Colombia’s most fertile farmland regions and boosting trade significantly.
Another 4G infrastructure project will connect Medellín with the country’s northeastern Atlantic ports. The Vias Del Nuis project’s inauguration took place on December 4th, 2021, expanding the country’s main freight corridor and providing transport infrastructure for 7,000 vehicles per day.
Prior to the completion of the Vias Del Nuis project, driving a truck from Cartagena to Medellin took 24 hours. The Vias Del Nuis project cuts that transport time by 25 percent, allowing the trip to be made in only 18 hours. It also puts the regional capital of Medellín only four hours away from the municipality of Caucasia.
The Colombian government has already approved several high-profile 5G projects as well:
- A new road network connecting the ultra-fertile Valle del Cauca region with the regional capital of Cali and the city of Palmira.
- A river transport project designed to improve the navigability of the Magdalena River, the country’s largest. Two-thirds of Colombia’s population lives in the river’s 100,000-square-mile drainage basin.
- A project to dredge more than 420 miles of the Magdalena River and build an access canal between the cities of Barrancabermeja and Barranquilla.
- Several airport expansions designed to improve the air transport infrastructure available at Cartagena, Buenaventura, Palmira, and Neiva.
All of these factors combine to make Colombia an attractive, competitive target for direct investment. Colombian investment in transportation infrastructure is a cornerstone of the country’s economic future and should continue to see major investment in years to come.
Source: U.S. Department of Commerce forecasted
Invest in Colombian Farmland Before Infrastructure Spending Gets Priced In
All of these developments will radically transform the profitability of Colombian farmland in the near future. New land, water, and air transport efficiencies enable farmers to sell produce more competitively, bringing greater wealth to Colombia’s investors – especially those with the foresight to purchase active agricultural plots in its most fertile regions.
Farmfolio has some exciting opportunities for direct farmland ownership that benefit from these infrastructure investments, and represent a compelling entry point in a fast-growing market that is currently underserved and undervalued by institutional investors. Fill out the form below to learn more.