Britannia Radio

If any investor has a long view on world markets, it's Lord Jacob Rothschild. 

The 73-year-old scion of the world-famous European banking dynasty need only look to his own family history, which dates back some 200 years to the rise of patriarch Mayer Amschel Rothschild in Frankfurt. Even after losses in his investment trust last year, Rothschild has a personal fortune estimated at $600 million. He also has a strong opinion on the prospects for farmland. "We think right now is an excellent point of entry for taking a long-term position in agriculture," he tells Fortune.

Rothschild did just that last year when he invested $36 million for a 24% stake in a venture called Agrifirma Brazil. The company is the brainchild of Jim Slater, a longtime City of London investor and investing writer known in the 1970s as one of Britain's most feared corporate raiders, and Ian Watson, a Canadian investment banker. It is not the trio's first investment in commodities together. In 2003, Rothschild invested with Watson and Slater in a company called Galahad Gold, which snapped up gold and uranium assets just as metals prices began to move up, and then sold shares publicly through the London Stock Exchange's AIM market. With commodities booming in late 2007, they liquidated the company's assets, locking in a 66% annualized return over five years. Profits in hand, the trio decided that the next big opportunity was in agriculture.

When asked about the case for buying farmland, Rothschild rattles off statistics on population growth before bringing up another issue of increasing importance: inflation. "If you look at the macro picture today," says Rothschild, "we have an extraordinary situation. If you take governments' printing money as fast as they are, borrowing as fast as they are, and bailing out white-elephant corporations, we're surely going to have an inflationary situation fairly soon." In that kind of environment, owning a hard asset like land is a good hedge.

Agrifirma has already acquired some 100,000 acres in the Brazilian state of Bahia and holds an option on another 60,000. This summer it will produce its first crops of soybeans, cotton, and corn. Rothschild and Watson say they chose Brazil in part because there was a large quantity of scrubland, or cerrado, that could be irrigated and converted to farmland, enhancing the value greatly. They also liked the fact that its economy has been growing robustly. And perhaps most important, Brazil has 14% of the world's freshwater resources, the most of any country. "The world is fully in a water crisis, and we haven't realized it yet," says Watson. "When you're exporting agriculture, you're de facto exporting water."

"They can't change the laws on me, because I've got the guns," says Phil Heilberg, pausing to take a bite of his turkey bacon. On a Monday morning in May the chairman and CEO of Jarch Capital is explaining his investment strategy over breakfast at the Regency Hotel near his office on Park Avenue in New York City. "As long as Gen. Matip is alive, my contract is good."

While Warner and Rothschild have focused on carving out a relatively risk-free way to profit from the farmland boom, Heilberg, 44, has taken the opposite tack. The American is putting his money into Sudan, Africa's largest country and one of its least stable. And he's hardly shy about the many ways his investment could go wrong. "I like to point out that it's a failed state, it's been sanctioned by the U.S., and it has a peace agreement that could unravel at any time and lead to armed conflict," he says. "The good thing is that you know what most of the risks are, and you can get paid for them."