Row crops such as wheat and corn have long been a staple of farmland portfolios. But some investors hope to harvest greater rewards by diversifying into the so-called permanent crops: fruits and nuts that grow on trees and vines.

This farmland comes with higher risks. It takes years for a tree or vine to become productive, and consumer tastes can change in the meantime. That’s what happened with Red Delicious apples, notes James McCandless, head of global real estate, farmland, at UBS AgriVest, a division of UBS Global Asset Management. “About 100,000 acres of Red Delicious turned into firewood” because people decided they liked Galas better, says McCandless, whose Hartford, Connecticut–based firm had almost $1 billion invested in farmland as of March.

But the potential returns are higher too. The nut group — almonds, pecans, pistachios and walnuts — is particularly strong thanks to health-conscious consumers and exports to a growing middle class in emerging markets. In California there’s a boom in the conversion of farmland from “low-value annual crops” like wheat, corn and barley to permanent ones, especially nuts and wine grapes, says Karen Klonsky, an outreach specialist in the Department of Agricultural and Resource Economics at the University of California, Davis.

The NCREIF Farmland Index, from the Chicago-based National Council of Real Estate Investment Fiduciaries, has posted a ten-year annualized return of 17.57 percent, including income and land appreciation. But for income, permanent crops rule. At the recent Global AgInvesting conference in New York, Rory Robertson, CEO for horticultural crops with Westchester Group Investment Management, used the NCREIF index to show that these crops’ annualized income has climbed from 13.06 percent to 18.28 percent in the past decade. Income from annual cropland has hovered at about 4 percent.

TIAA-CREF, which bought a controlling stake in Champaign, Illinois–based Westchester in 2010 for its farmland management skills, has a long-term strategy to split crop investments 70-30 between row and permanent, says agriculture portfolio manager Justin (Biff) Ourso. The $569 billion, New York–based investment firm had about $4.5 billion in farmland assets at the end of 2013. TIAA-CREF’s permanent crops include wine grapes, almonds, walnuts, pistachios, citrus, apples, avocados and cranberries, Ourso says.

With row crops TIAA-CREF buys the land and leases it back to farmers who assume the risk, but it manages permanent crops itself via Westchester. The investment in the trees or vines is considerable — “anywhere from 50 percent to 80 percent of the value of the farm,” Ourso explains.