The French Find the Real Best Cash Cows

I found this article in today's New York Times entitled "French Find Safety Nets Multiplying in Pastures" to be fascinating.

As the article describes, the French are creating a marketplace for non-agricultural investors (ie., the man or woman on the street) to buy and sell cattle to get a fixed rate of return - essentially through their offspring which are either sold to realize the return or reinvested. Each cow costs roughly $1700 and provides the investor with a return of around 4%, which beats the savings rate at banks and offers more stability than equity investments. According to the article, it also appeals to people's desire to invest in tangible things.

For the farmer, the benefits are clear as well. By raising cattle owned by others, it frees up their own capital for improvements and provides more tax deductions.

I find this a fascinating idea, as I believe strongly that the current recession will give way to many fixed, alternative investments that produce a return exceeding cash without the risk profile of equities. However, there is an element of these type of investment which obviously concerns me. First, it is obvious that the risk can never be fully understood by the individual investor. Second, oart of it harkens back to the last few years when everything under the sun (from commercial aircraft to mobile homes) were securitized and sold to unsuspecting retail investors who believed that they were getting in to the deals of a lifetime.