Golden ground: hidden capital farmers, investors, government

The value of agricultural land is reaching record highs. While farmers fight for every hectare, investors see land as a safe haven, and governments are using it as a key to the spatial transition. This scarcity turns land into strategic capital, with consequences for entrepreneurship, policy, and investments.

For farmers, land remains the backbone of their business, but expansion is becoming increasingly difficult. Space is limited, regulations are complex, and prices continue to rise. According to the Land Registry, the average price for agricultural land in the first quarter of 2025 was €91.300 per hectare; grassland averaged €82.500, and arable land even €100.600. Land is therefore no longer just a means of production, but also a stable investment. An additional hectare, for example, means more space for manure application, more flexibility in the crop rotation plan, and often also more security for the future.

Farmers foughtn for scarce acres
Especially in regions with fertile soil or favorable locations, demand remains high and competition fierce. For dairy farmers and arable farmers, acquiring land has become a strategic choice, not only for production but also for business security and capital growth. In family businesses, land forms the foundation of continuity: those who own sufficient hectares can better absorb fluctuations in yield or costs and maintain control over the future. Due to the significant scarcity of land, vigilance is increasingly important, otherwise you'll often miss out. Furthermore, you still have to regularly consider a sale by tender. This is becoming increasingly common and generally leads to price increases.

Land as a safe haven
Not only farmers, but also investors have discovered the value of agricultural land. "Land is like gold," said Jos Ebbers, chairman of the NVM Agricultural & Rural Estate, recently. The comparison seems apt: land prices remain remarkably stable, even in economically uncertain times. According to Rabobank, prices are expected to remain stable or rise slightly by 0 to 5% in 2025. This makes land a tangible, low-risk investment that offers protection against inflation and currency depreciation.
Investors base their interest in agricultural land on three pillars: structural scarcity—after all, no new land is being added—versatile potential uses (agriculture, energy, infrastructure, housing), and stable value growth. Investing in land, however, requires expertise: location, soil quality, and legal status largely determine the ultimate return. A plot of land near urban expansion or energy facilities has a different future prospect than land used exclusively for agriculture.

The government as a silent player in the land market
Agricultural land is not only economically valuable but also politically sensitive. For governments, it is a scarce commodity that affects housing, climate, nature, and energy. Demand for land is increasing, while the Netherlands is not growing. This creates tensions between agriculture and policy: farmers are confronted with nitrogen regulations, expropriation, or changes to the function of their land. Regional differences are significant. In Flevoland, where a lot of land is also being purchased for spatial development, the average price is now €184.100 per hectare, the highest in the Netherlands. To maintain control over the market, the government uses instruments such as the Municipalities' Preferential Rights Act and exit regulations. In this way, it tries to prevent increases in value from remaining entirely in private hands and crowding out public interests. Land has thus become a policy instrument that helps determine the course of the spatial transition.

New collaborations between farmers and investors
High prices are forcing farmers to adopt more creative business practices. For some agricultural entrepreneurs, direct purchase is unfeasible, making leaseholds, long leases, or partnerships with investors more attractive. In such structures, farmers hold the right to use the land, while investors primarily benefit from increased value. Regional land banks and cooperative models are also emerging, where farmers jointly invest in expansion or sustainability improvements. At the same time, the number of investment funds focused on sustainable land development, for example, through carbon capture and storage, nature management, or energy generation, is growing. This also gives land social value: as a driver of the climate transition.

From means of production to strategic capital
The role of agricultural land is changing rapidly. Where once it was primarily about production, it now also revolves around spatial claims, sustainability, and future value. Social pressure on land use is increasing, while farmers feel their leeway is shrinking. The challenge lies in finding a balance: how do we keep agriculture profitable and space available for other purposes? A rapid change in function can harm food production and farmers' revenue models, but smart collaboration between agriculture, energy, and nature actually creates opportunities. Think of agricultural nature management, solar farms or nature development on less fertile plots, or land exchanges within area development. Those who understand the dynamics of the land market and are forward-thinking can benefit from this, whether it's about business security, returns, or policy. Land may be worth its weight in gold, but its true value lies in good stewardship and sustainable use.

Paul & Joost Bakker

Paul and Joost Bakker are owners of LandEignaar.nl, the platform that provides insight into the agricultural land market. Their contributions highlight developments in the land market, leasing, and regulations.

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