Another Reason Why I am glad I am not French

They think cows are good long term investments. On second thought, maybe they are onto something here. From the NYT:

For Pierre Marguerit, 60, cows make a safe, secure investment, allowing for long-term growth from a renewable resource. The cow contracts are hardly new, but go back to Richard the Lionheart; the French word for livestock, “cheptel,” is the root for “capital.”

These are not exactly cash cows. But investment in Mr. Marguerit’s Holsteins will bring a 4 to 5 percent return a year after taxes, he said, based on “natural growth” — the sale of their offspring. That compares to an interest rate now of 0.75 percent on the basic French bank account.

Last year, his business went up by 40 percent, and so far this year, it has “practically doubled ,” said Mr. Marguerit, the managing director of Élevage et Patrimoine, a cattle investment firm in this part of eastern France, near the Alps, and president of Gestel, which works with farmers and investors.

The supposed 4% to 5% percent sounds great (especially after taxes, its more like 10%, and in socialist France, maybe even higher) until another mad cow disease comes along. In the US this trade may be even more attractive though because of our agricultural subsidies.

“People have saved money and don’t want to waste it,” he said. “Stocks have fallen a lot, and people see it. We need somewhere to put our money for a long-term investment, something more stable.”

At the moment, there are about 37,000 cows under contract in France at some 880 farms, according to theFrench Association for Investment in Cattle. But the potential market is huge, Mr. Marguerit insists, perhaps as many as one million head in France and six million in Europe as a whole.

A typical couple will buy 10 to 20 dairy cows for about $1,700 each and can decide to sell the offspring each year or keep them as additional “capital.”

“At this difficult time, it’s a much better investment than real estate and much more tangible than the stock market,” Mr. Marguerit said. He then proceeded to praise the new interest “in natural, organic and lasting things” among the French, who have always romanticized the countryside and imagined themselves shrewd peasants at heart. “This is part of the patrimony,” he said.

In the steep financial crash, “we’re having a moment of realization — we’re landing hard and people are asking real questions.” Diversify into cows? Why not?