The sector is showing signs of benefiting from long-term demand-driven trends.
For investors willing to accept the higher level of risk associated with sector-specific funds, the First State Global Agribusiness fund provides exposure to global companies involved in the agricultural industry.
According to the US Census Bureau, the world population is expected to rise from 7.02 billion on 6 June 2012 to 8.2 billion by 2030.
Population expansion should promote the need for more efficient use of technology to meet demand and ensure quality of produce, replenishment of raw materials and the distribution and efficient use of the world's most precious commodity, fresh water.
In addition, there is the higher impact of urbanisation in many emerging economies. This should lead to higher wages, better living standards and a movement away from low energy produced food staples to a demand for meat and dairy produce.
It is not just the emerging economies' dietary changes that are having an impact. In the West in the last decade or so we have experienced increased demand for organic produce. Land for growing this yields 50 per cent less than a fertilised field and requires considerably more water.
The fund has a relatively short history as it was only launched in May 2010, however the management team has a wealth of experience managing natural resources.
The benefit of investing in a fund or companies that specialise in this sector is that, regardless of weather patterns, disease and drought, they seek to enhance yields, streamline production, replenish raw materials and reduce water wastage. This should add value to the business without leaving it exposed to less controllable elements such as weather.
Performance of fund since launch
Source: FE Analytics
Since its launch in May 2010, the £35m portfolio has returned 8.25 per cent. The fund, which is headed up by Renzo Casarotto and Skye Macpherson, has a minimum investment of £1,000 and a total expense ratio (TER) of 2.04 per cent.
Sheridan Admans is an investment research manager at The Share Centre. The views expressed here are his own.