Would you invest a billion dollars in Northern Ontario agriculture?
If your answer is no, you may want to reconsider.
The combination of rising global population and financial uncertainty make farmland a safe bet. Nowhere is that more true than in Canada, which enjoys abundant arable land, ample rainwater, developed infrastructure, and a long tradition of expert farming. Northern Ontario has all of Canada’s advantages, and then some. It is also one of the largest agricultural development opportunities in the world.
The question is therefore not whether Northern Ontario is a good investment, but how to make that opportunity a reality.
Area One Farms believes the answer lies in partnerships with Northern farmers and the continuation of government programs and policies that support their growth. The following few blog posts will offer specifics on why the opportunity in Northern Ontario is so captivating, a model for ensuring that the benefits of new industry stay in Northern communities, and comments on how the growth of Northern Ontario agriculture is best supported.
Northern Ontario’s Agricultural Advantages
The first and foremost reason to invest in Northern agriculture is thus the sheer size of the opportunity.
The Great and Lesser Clay Belts stretch across a vast 120,000 square kilometers of Northern Ontario. Of that, the Ontario Ministry of Agriculture, Food, and Rural Affairs identifies at least 4.4 million acres as being suitable for agriculture. Currently only 2 per cent is being farmed. Even a billion dollar investment would barely scratch the surface of what is possible.
The second reason to invest in Northern Ontario agriculture is its comparative climate advantage. Yes, its climate advantage.
As any farmer in New Liskeard can tell you, Northern Ontario gets more rain than it needs. Up to 30 years ago or so, that was a serious problem for farmers. But with the advent of reliable and affordable tile drainage, water has become an asset rather than a liability. Plentiful water and systematic tile drainage make Northern Ontario farms twice as profitable per crop acre than farms in the Prairies.
Warming in the last 30 years has also added weeks to the growing season, making it easier to harvest a crop, and made new crops viable to farm in the North. Just as happened decades ago in Southern Ontario, Northern Ontario will see new, more profitable warm weather crops. This trend towards a longer and warmer season is already well documented and is likely to continue.
Expansion Through Partnership
Capitalizing on this opportunity will take great farming and innovative financing.
The farming piece is straightforward: Northern Ontario farmers have the skills and the know-how to grow food in the North. The financing part, however, is more complicated. Much of the opportunity in Northern Ontario requires land improvements, the capital costs of which far outweigh the price of land. How then does a farmer finance expansion where he or she is buying land to improve?
Area One Farms is the only Canadian agricultural investment group building partnerships with farm operators so they can expand without fees, rent or interest. The model is based on co-investment. We empower farmers to grow and scale up their operations to keep farms in the family for the next generation.
Our vision of a viable, sustainable farming industry in Northern Ontario is based on a very real experience partnering with farmers there. Together with some tremendous people, we have begun to bring old farmland back into production and build farms similar to what you see further South. Our partners are expanding their base, bringing in their family members, and growing within their communities – all with the stability provided by ownership.
As more and more people invest in Northern Ontario agriculture, it will be essential to ensure that the benefits stay with the people and in the communities where they belong. Area One Farm’s partnership model is just one way of doing so.
Supporting Agriculture’s Growth
The Ontario government’s Growth Plan For Northern Ontario identifies agriculture as a priority economic sector with a focus on growth and capitalizing on the region’s competitive advantages. What this means practically could be any number of things.
Drainage tile, for instance, is essential to creating viable farms in the North. Government grants that defray the cost of needed tile mean that more farmers are able to finance their expansion. That tile increases yields and quality. It is also the key piece of infrastructure Northern Ontario needs to deliver on its production capacity.
For proof, you only need to look at Southern Ontario, where the vast majority of farmland has tile drainage. The Northern Heritage Fund Corporation (NOHFC) is a model program for supporting new businesses and helping farmers invest in tile drainage. NOHFC’s expansion should be encouraged.
Crown land is also abundant in Northern Ontario. Of that, only a small portion is farmable. However, that small portion represents millions of acres of fertile land – far more than even the most ambitious farming plan could envision.
Putting a small amount of Crown land in the North towards farming would allow farmers to achieve scale more easily and position the Province to capitalize on the growth in industry, jobs, and production. Beginning with old private farmland that reverted to the Crown land, sale of these fallow properties could bolster government revenues and spur a sustainable farming industry in Northern Ontario. At the very least, it would catch the attention of investors looking to capitalize on the region’s billion-dollar opportunity.