Agriculture has long been an essential component of economic development. It provides food security, generates employment, supplies industries with raw materials, and contributes to export earnings that support national growth. However, land is a vital resource that supports all farming activities. It is on farmlands that crops are grown, livestock is raised, and agribusinesses thrive.

The entire process of how this land is owned, managed, and transferred ultimately determines how much agriculture can contribute to a nation’s progress, which has given rise to the concept of agricultural real estate.

In recent times in Nigeria, farmland is no longer seen only as soil for cultivation; it is increasingly recognised as an appreciating asset with strategic value. 

Agricultural real estate is a sector that transforms farmland from a purely productive space into an investment opportunity, bridging agriculture’s traditional role in development with modern opportunities for wealth creation.

An advantage of this sector is the promotion of clear and enforceable land rights, which are important to harnessing this potential.

Agricultural real estate is more than property; it is both a guarantor of food security and a pathway for investors seeking returns with impact, aligning Nigeria’s development needs with market opportunity.

What is Agricultural Real Estate?

Agricultural real estate is a type of real estate, also referred to as farm real estate. Agricultural real estate comprises parcels of land and buildings used primarily for the production of farm products, such as crops, livestock and other agricultural activities. This can include raw farmland, established farms complete with infrastructure like irrigation and storage facilities, and agro-residential projects that combine housing with farming activities. 

Agricultural real estate is crucial for food production and can vary significantly in size and use, depending on the type of farming practised and the geographical location. It represents a segment of the real estate market, offering investment opportunities and contributing to the rural economy.

In countries like Nigeria, Agricultural real estate serves a dual purpose, supporting food production while also acting as a long-term appreciating asset for investors. These properties vary widely, ranging from undeveloped arable land suitable for crop cultivation to fully operational farms with ready-to-use facilities.

You can invest in agricultural real estate through several avenues:

• Direct Ownership: This involves the outright purchase of a parcel of land. It means you have complete control over operations, but it also requires active management or hiring professionals, such as a farm manager, for proper and smooth running.
• Land Leasing: Investors buy land and lease it to experienced farmers or agribusinesses for a fixed rent or a profit-sharing arrangement. This is a more passive approach, providing a steady income stream.
• Agro-real Estate Platforms: A growing number of Nigerian companies now offer investment opportunities in farm estates. These firms buy large parcels of land, develop them, and sell or lease them to investors, often providing end-to-end management services for a fee.

Benefits of Investing in Nigeria’s Agricultural Real Estate 

Agricultural real estate presents several benefits, according to Dr Simon Ogwu, Chief Operating Officer of AG Mortgage Bank. Agricultural real estate is a strategic investment that can provide a significant source of income. Some of the other benefits are:

1. Growing Food Demand and Food Security: Rapid population growth and urbanisation lead to an increased demand for agricultural produce, positioning farmland owners to profit from this expanding market. Investing in local agriculture also contributes to national food security, a critical issue for Nigeria’s growing population. The sector already accounts for 25% of GDP and employs a large number of the labour force. Farmland investment strengthens food production, reduces import dependency, and aligns with Nigeria’s goal of food self-sufficiency.

2. Inflation: Nigeria’s inflation rate stood at 34.19% in June 2024 and 22.97% in May 2025. These rates impact agricultural land and commodities such as palm oil, maize, and cocoa, which tend to appreciate in value. Agricultural land preserves value, often appreciating faster than inflation and outperforming many traditional investments.

3. Diversification: Adding agricultural land to your investment portfolio reduces risk as it is stable, compared to other forms of investments.

4. High Return Potential: The investment in farm lands allows you to gain from land value appreciation, which is a central principle of real estate. You also have the opportunity to earn from agricultural produce through direct sales. There is also an avenue for passive income through managed farm estates or land leases, which generate earnings through either profit-sharing or rental arrangements.

5. Employment & Local Development: Agricultural investments help generate jobs, which will simultaneously develop rural communities, since most farm lands are situated in rural communities. This, in turn, will support economic development and promote social stability.

6. Long-Term Appreciation: Farmland values in Nigeria have consistently risen over recent years, making it an asset for long-term growth and wealth generation, which can be passed on.

The Risks of Agricultural Real Estate Investments in Nigeria 

Just as it is with every business, investing in agricultural real estate in Nigeria is not without risks, some of which include:

1. Land Title and Documentation: One major risk associated with agricultural real estate is related to land title and documentation. Without clear ownership, the investment is at risk of loss. It is important to conduct a thorough search at the Land Registry to verify the title’s legitimacy and ensure there are no existing disputes or pending government acquisitions.

2. Infrastructure Challenges:  The absence of essential infrastructure, like roads, water, and electricity, is another risk. Many of Nigeria’s farmlands are located in rural areas with poor infrastructure. These infrastructures are necessary for profitable farming and to ease transport to markets. Infrastructural deficits would mean limited access to water and electricity, as well as a shortage of skilled labour, which would inherently reduce productivity and profitability.

3. Regulatory and Policy Change: Changing laws, regulations and policies associated with land ownership laws can affect farm business continuity. In most cases, policies are not effectively communicated and not backed up with the necessary aids, leading to confusion, losses and deprivation.

4. Climate Change & Environmental Risks: Climate change poses risks to farm productivity and returns. Extreme weather conditions, such as floods or droughts, as well as pest infestations, can lead to crop failure. 

5. Market Volatility: Prices for crops and agricultural products can fluctuate due to economic instability, affecting income and cash flow. The prices of agricultural commodities are subject to global market forces and local demand, which can fluctuate. A sudden drop in the cost of a crop like cocoa or maize can significantly impact returns.

6. Operational Management: Many times, a lack of agricultural experience or engaging unqualified farm managers can result in poor yields and financial losses.

7. Security Issues: Rural areas may have security concerns, such as theft or community disputes, which can impact farm operations and safety.

How to Minimise Risks 

You may not be able to avoid all the risks associated with agricultural real estate, but they can be managed through the following means:

1. Conduct Thorough Research: Verify the title, deed, and other legal documents, research the land’s history, soil type, and water availability, which can be achieved by engaging a reputable lawyer, land surveyor, and possibly an agronomist to assess fertility and crop potential, thereby confirming legitimate ownership and ensuring community acceptance.
2. Choose the Right Location: Select land in a region with a favourable climate, proximity to markets or processing facilities to reduce transportation costs and improve profitability, and ensure good road access.
3. Invest in Infrastructure: Allocate a budget for essential infrastructure, including irrigation, storage, and power, to increase yields and protect harvests.
4. Diversify Your Portfolio: Consider holding small parcels in different locations and cultivating a variety of crops to spread risk across your portfolio. Combine crop farming with livestock, aquaculture, or timber to balance risk and improve cash flow.
5. Professional Management: Ensure that you hire experienced farm managers or partner with reputable agricultural companies or agro-real estate platforms to achieve operational efficiency and higher returns,  especially if you will be a passive investor.
6. Value Addition: You can maximise profits by processing crops into higher-value products, e.g., cocoa beans into chocolate or cassava into garri or glucose.
7. Monitor Market Trends: Stay informed and updated at all times about demand, crop prices, and consumer needs, and structure your production accordingly to maximise profits.
8. Leverage Government Programs: Utilise government support, grants, or tax incentives to lower costs and expand profitability.
9. Regular Maintenance and Security: Maintain infrastructure, monitor activities, and invest in reliable security to prevent losses.
10. Start Small and Scale Gradually: Begin with manageable farmland and expand as you gain experience and confidence.

Getting Started: A Step-by-Step Guide for Nigerian Investors

Follow these steps to begin your journey in agricultural real estate.

1. Define Your Investment Goal: Choose what you want, whether you want a passive investment (such as leasing land or investing through a platform) or an active one (direct farming). This will help streamline your entire strategy and research.
2. Budgeting and Financing: Determine your budget and examine the financing options available to you, including those offered by the government, cooperatives, loans, or personal savings.
3. Conduct Proper Research: As emphasised, this step is non-negotiable. You need to conduct proper research and hire professionals to vet the land, its documentation, and its potential and potency.
4. Purchase the Land: Once you are satisfied, you can proceed with the legal purchase and secure all necessary documents, including a Certificate of Occupancy (CO).
5. Operationalise or Lease: If you’re farming yourself, create a business plan, procure necessary equipment, and hire a farm manager. If you’re going the passive route, find a reputable farmer or company to lease the land to.

Investing in agricultural real estate in Nigeria presents a compelling opportunity to build wealth and secure your future. It’s a tangible asset that benefits from both land appreciation and productive output. While the risks associated with land titles and logistics are real, they can be effectively mitigated through thorough research, due diligence, and strategic partnerships. By embracing this opportunity, Nigerian investors will not only grow their wealth but also make a meaningful contribution to the country’s food security and economic development.