Sustainable farming in Nicaragua

I farmed when I first got to Nicaragua. The soil is very fertile and produces great vegetables. I did not have a special permit but sold all my produce in the markets. If you have a good product the other venders in the market will buy you out very rapidly.
The first mistake you do not want to make is trying to introduce something new to Nicaragua. If you give it to them they will tell you it is very good and they will eat the hell out of it. They wont buy it. Stick to the traditional crops that are raised here and you can make money selling to the markets. Use American farming techniques ( fertilizer, herbicides, fungicides and pesticides. You production will increase ten fold. All of the above chemicals are cheap in Nicaragua. If you are into organic gardening, the bugs and fungus will eat you alive. When your vegetables mature, you sell it at the markets for cash money and this bypasses any work permits necessary to operate.

Pitaya, Plantains, Citrus, Coffee, Papaya, Cacao , and Livestock
Good Agricultural Investments for Nicaragua and other Good Reasons to Invest too.

Nov. 11, 2013
Diriomo, Nicaragua

Dear Own Nicaragua Real Estate Reader,

As, many of you know, for the last eight months, I have devoted most of my time to developing a farm here in Nicaragua , for a friend from New York.
Today's post,  I will include, part of my last blog letter for Finca Mil Amores,  I hope you enjoy and subscribe, to the newsletter.
Another interesting situation,  developing in the states,  big brother trying to make it difficult for small farmers to stay in business.
So many people from all over the globe, are looking into being self sustainable, many taking steps , to invest in small farms throughout the Americas, North, Central and South.
The FDA's proposed food safety regulations under the Food Safety Modernization Act (FSMA) pose significant problems for sustainable farmers, food producers, and food hubs across the country.
 
Under the proposed regulations, many farmers will be forced to comply with high-cost, industrial-scale regulations, and they will be unable to use traditional, sustainable growing practices.

Food hubs and local food businesses will be forced to deal with costly and burdensome paperwork. Ultimately, consumers will face increased food prices and reduced availability of locally and sustainably produced foods.

Another reason I choose to live and invest in Central America.

A quick note on the title of this blog:
Pitaya, Plantains, Citrus, Coffee, Papaya, Cacao , and Livestock
Good Agricultural Investments for Nicaragua and other Good Reasons to Invest too.

Inspired by an article written by my good friend and mentor Lief Simon a renowned worldwide consultant on living offshore, with his wife Kathleen Peddicord and owners  of  Live and Invest Overseas
Lief talks about the timber and agriculture business , with some statistics and fundamentals  about investing in agriculture based on a quarterly report he got from a friend. Leif says:   
“The global population continues to increase, there's limited arable land in the world, and the demand for bio fuels is expanding.
One statistic more interesting showed that institutions own twice as much timberland as agricultural land, even though the amount of available investible agricultural land is more than three times greater than that of timberland. This despite annualized returns over 20 years being higher for agri-land than for timberland. Trees are just easier to manage, says Lief.

The downside to timber for the individual investor is the long life cycle of the investment. Trees take time to grow. Assuming average growth, you have to wait 20 to 25 years for a full harvest with teak. Mahogany can be harvested at 15 years, but is better left for 25 years. This is the case for most hardwoods.

Softwoods like pine and eucalyptus can have shorter times to harvest, starting at 10 to 12 years if the end use is pulp or posts, but you're looking at 25 years or longer with pine if you want larger-diameter logs for lumber.

While you can get cash flow from thinning  over the lifetime of the investment, the bulk of your return from timber comes at the end with the final harvest of the trees. Institutional investors don't mind the long cycles; they have long-term outlooks.

The report his friend sent, included a table comparing the average annualized returns for agriculture, timber, stocks, and bonds. Agriculture comes out on top with 11.9%, but that includes land appreciation. Annual cash flow yields from agriculture (especially if you're not doing the farming yourself) tend to be in the 7% to 8% range. Average annualized returns quoted in the report for timber are 8.9% including land appreciation, which seems low to me, but the report's figures are based on properties owned by “non-profit” institutional investors, i.e. pension funds. I tend to see (and to look for) timber returns that reach into the double-digit range...10% to 15%.

The report quoted stock returns at 8.4% and bond returns at 6.4%. However, as an inflation hedge, both agriculture and timber score better. Stocks, in fact, have a negative correlation with inflation. The risk-adjusted performances for timber and agriculture also beat those for stocks and bonds.

So why isn't everyone investing in productive land? Because, while it can be an easy investment to manage once it's put in place, it's not easy to put in place. It's certainly not as easy as calling up your broker to buy a stock (does anyone still do that?.

Investing in productive land generally also requires more capital than a stock or a bond investment. You can't invest US$1,000 in a portion of a farm like you can invest US$1,000 in a few shares of a company. Further, land isn't as liquid as stocks, so if you need to be prepared to remain in the position for the long term...really, you have no choice.

Still, some portion of everyone's investment portfolio should be in productive land. “
Thanks Lief, I think this is a lot of good information, for people in my network and for this farm blog.

I am not the world traveler , like Lief, but I do know Central America very well and have lived and done business from Mexico to Panama with exception of  El Salvador and Honduras. 
For an investment in farmland, I choose Nicaragua with Panama being a close but distant second. Both are stable countries, both economically and politically, and both have lots of productive land available, Nicaragua a lot more , while productive land in Panama is less , and more expensive.

Nicaragua has plenty of water but depends on where the farm is located, in some areas water, and wells, are easy, while  other areas with great soil, the water is deep and wells can be costly, but with incredible, reserves sometimes as high as 400 GPM . 

Management and administration of farms I see as a new industry for North Americans looking to buy land and put it into productive use. On the horizon we will see more developers, wakening up to the idea of buying and developing farmland and financing these projects as LP's or LLP's . More and more turn-key investments are being put together specifically for individual investors, as developers realize that retail investors are seeking them out.


Lastly and very important about Investing in Nicaragua's Black Gold
( Farmland )  It's Unseizable and Non-reportable.
Investment Offshore in Real Estate or Gold does not trigger a reporting requirement to the U.S.

With all that is going on in the  United States from the HIRE Act, to Obama Care. The idea of investing overseas is more than just an attractive, idea; it's the smart thing to do to protect yourself. .
Don't wait until this new legislation, takes full effect, and other laws in the works, to keep you and your money in the U.S. 
Many Foreign Banks  are closing the door on new accounts for Americans , My friend with a bank account in Costa Rica for 11 years was asked to bring a five year collection of IRS tax returns , if, he wanted to keep his Costa Rica Bank account open. He did not comply.
I urge you, if you have been thinking about investing offshore, The gap is closing quickly, 
Options for Americans to protect their assets abroad are going to continue to diminish.
Please feel free to contact me at [email protected]  for more information , or sign in here.


Information on Finca Mil Amores

It's been another busy couple of weeks here in Nicaragua , so much going on at the farm. We have a lot to cover.
Last week we had an unexpected visit from the Owner of Finca Mil Amores, It's always good when Michael's here; his enthusiasm for the project is 1000 % positive, as his stamina for working hard, he has got to be, one of the hardest workers I have had the pleasure to know.
We really got to fast track some things this week with Michael here. I love to downhill ski, the fast movement and thrill of it. I felt like being in Vale, Co, this week with all the fast, and thrilling moments of the week.
There was also some time at the end of each day for good food and cheer with our neighbor, and consultants who are helping to make, Finca Mil Amores a dream come true.
I left you all in suspense from my last blog, about the building of the Rancho.  Well today is day 18, and we are just about finished. We got behind, with some days of heavy rain, and getting building supplies to the building site was a mess.
But when life gives you lemons, there's only one positive option, make lemonade.  Our lemonade project was to pave the road with block, so when Michael Schnorr saw the problem, the order was given,  buy,  all the block we need and take care of the muddy roads.
This led to a more sophisticated plan, so with summer at our doorstep, we went forward with instructions to our engineer, and he  is now working on a detailed plan for all the roads and rain gutters , which we will build over the summer.
Right now I am widening the entrance, to the farm, earlier this week we bought 200 post for Pitaya plus about 50 we already had, The Pitaya keeps growing, and we have to add more post to support the new growth, see photos.
Yes the second bloom of flowers, have sprouted and that means Papaya Fruits, It's amazing, we planted these small plantings, that looked like small 6-12 inch twigs just six months ago.  Here are some photos.
Other things we are doing this week, the building of the latrine,  first we had to dig a hole 4 feet by 4 feet square then 22 feet deep , it took two men, almost a full week just to dig the hole, today we started the block construction of the block work, platform, all secured by steel rebar. This will take another 5 days to complete.
As usual, cleaning , de- bugging and fertilizing , all of our crops and fields, the grass is starting to seed so we had to clean up those pesky weeds to allow the new seed to take root, we have been blessed these last three nights with a nice rain each night, This keeps everything fresh, and helps to re germinate the grass seed.
On our dinner plates this week we enjoyed, fresh squash, home grown organic corn, and all the fresh cilantro for our salads. What a treat, we shared with neighbors and friends.
Lastly and Best of all, Michael and I visited a Farm a family owned Foundation, whose ideas, methods, and Production can serve as a model for animal production. They raise pigs, and produce gas form the pig manure, they raise rabbits, purebred goats, real North American sheep, worms, chickens, eggs, goat milk, they make their own fertilizer in liquid and castings, they grow herbs, and mostly all the food for their own animals they grow on a farm about 90 acres.
We made a deposit on four pregnant goats two Alpine and two Nubians' and also four female lambs. We are designing and building structures to raise these beautiful animals.
Minor problems this week were cows entering the farm and eating our grass, we really need to more than just mend fences, we need new fence on about 100 meters.