US land has beaten shares as an investment by fourfold over the last years – and may be an even better bet if you can grow grapes on it, a pension fund manager has said.

Share investors would have turned $1,000 put into US equities in 1950 into $250,000 by last year, net of taxes but with dividends reinvested, Porter Martin said.

The same sum invested in Illinois farmland with notional gains reinvested, and net of property taxes, would have grown into $1.1m.

"That shows the value of compounding, and how to get rich slowly," Mr Martin, president of US-based fund manager Martin, Goodrich & Waddell, told an investors' conference in London, forecasting further gains as population growth swelled demand for food.

"This is not about corn for ethanol. It's about world demand for agricultural commodities," he said.

'Tremendous opportunity'

Land gains could be supercharged by growing grapes, he added, highlighting annual returns of 12-15% over the last 16 years from the firm's investments in California vineyards.

"We achieved the same returns last year and we will do so in 2009," he said.

"It's a tremendous opportunity."

'Fish get priority'

The trick for buyers was to get land which is not reliant on Federal aquifers, on which use is limited by acreage and clouded in political and environmental concerns.

"With some, fish get priority over farming projects," Mr Martin told the World Agri Invest Congress.

"It is very advantageous to get a second source of water."

The firm's 45,000 acres in California include 3,000 acres in the Joaquin Valley, a particularly productive region.