When it comes to investment options, Wall Street can't pave the way to retirement better than an Indiana crop row.

Since 1990, Hoosier farmland has generated greater returns than stocks within the Standard & Poor's 500 index, according to Chris Hurt, Purdue University agricultural economist. In a stock market gyrating wildly as reports of accounting scandals rock corporate America, farmers and others who own farmland should feel vindicated, Hurt said.

"During the 1990s, many Indiana farmers lamented that their retirement funds were tied up in farmland, while their city cousins enjoyed years of stock returns exceeding 20 percent," he said. "But when we look at this with a little bit longer perspective -- and not just stopping in 1999 when the stock market looked like a glorious opportunity -- it turns out that farmland has done quite well in Indiana relative to other investments and, especially, the stock market."

Hurt compared a $1,000 investment in S&P 500 stocks in 1990 to an identical amount invested the same year in Indiana farmland. Returns covered the nearly 13-year period ending July 31, 2002. Stock earnings were based on annual returns and dividends; farmland earnings were based on annual returns plus land value appreciation, minus certain expenses. Income tax consequences were not subtracted from either set of numbers.

The S&P 500 is a broad-based index of common stocks. It is considered a benchmark for U.S. equity performance.

Hurt found that while average returns by annual percentage growth were slightly higher in the stock market, Indiana farmland came out ahead in total returns. The numerical improbability occurred because the S&P 500 experienced greater annual highs and lows during the period analyzed, while farmland values and returns inched up steadily each year.

"Since 1990 the stock market has had a higher average annual return -- about 11.3 percent -- but Indiana farmland has had a return of 11 percent," Hurt said.

"What is really interesting is that $1,000 invested in the stock market in 1990 had grown to more than $5,000 by the end of 1999, where farmland and its returns had grown to only about $3,000. Since 1999, however, the stock market has fallen on hard times. Now what we're seeing is that $1,000 invested in farmland in 1990 has accumulated about $3,800 on a pre-tax basis, while the stock value now stands at about $3,300."

Land values have increased an average of 5.8 percent per year since 1990. Farming returns -- measured as the annual cash rent less real estate taxes, and a management fee -- has added 5.2 percent annually in the same period.

Hurt believes farmland might become a more attractive investment in the years ahead, particularly if the stock market continues to sputter.

"In the stock market there's a lot of uncertainty now. This includes confusion about potential fraud within companies, fraud within the accounting and uncertainty as to the true profits or losses when accounting is straightened out," he said. "That uncertainty has led to lower stock values and is causing some investors to look more seriously at 'tangible assets,' instead of something on paper, like stocks. What is 'tangible'? Things like real estate, farmland, precious metals, collectibles -- items people can feel."