Savills Research has developed an Opportunity v Risk Matrix tool to help make an initial assessment of the relative opportunities and risks of farmland investment in different countries. The scores are derived from a detailed set of metrics combined with our experience and knowledge of the markets. The basket of countries used in the tool is the same as that used in our Global Farmland Index.
RISK SCORE
(the lower the better) is derived from a matrix that looks at the range of potential risks. To some degree these can be categorised into those, where the investor has no control such as political and economic stability and the weather, and those where some control might be possible to alleviate the extent of the risk. This might include location to take advantage of the current infrastructure.
BENEFIT SCORE
(the higher the better) is derived from a matrix of factors which identify potential agronomic advantage and investment returns.
SCORE BALANCE
(the higher the better) is calculated by subtracting the Risk Score from the Benefit Score. Figure 4 illustrates the three components with the Score Balance showing the potentially best opportunities ranked low to high from the left side of the graph.
The scores given are an indication of the relative risks between each country and should only be regarded as such. Although the types of risk may be similar, there are significant differences in the weightings for factors such as climate and infrastructure, between regions within countries. See Risks and Benefits below for more details.
.png)
.png)
.png)
.png)