This year, Area One Farms is launching not one, but two new funds to increase our ability to partner with Canadian Farmers who need to expand their farming operation. Featured in Pe Hub’s Buyout Magazine, Joelle Faulkner says,
Area One Farms Fund IV is targeting C$250 million (US$194.4 million) from institutions, with room to raise around C$100 million more.
A cornerstone commitment of C$100 million has been secured from a Canadian institution. The fund has a 10-year term.
Fund V is aimed at Canadian individuals and structured as a permanent-capital vehicle, with liquidity options starting in year five.
It will seek C$50 million to C$100 million to invest in Manitoba and Saskatchewan, where laws limit the ability of institutions to purchase farmland. Faulkner hopes to hold first closes in the summer and to wrap up fundraising by year’s end.
Both of these funds allow us to continue growing our vision to help family farms in Canada. Especially Fund V, which allows us to partner with farmers in Saskatchewan and Manitoba. Joelle Faulkner continues,
The idea is to help farmers expand or keep their operations in the family, Faulkner explained.
“Either you’re retiring and you have no kids interested [in farming], in which case you want to sell,” she said. “Or you’re retiring and you have three kids interested, so you have to triple the farm size, and you need so much capital.”
Because Area One’s partners earn income and appreciation on the part of the property they don’t own, “unless they could do it really, truly on their own, they’re better o with us than any other method.”
Follow this link to read the full article: Buyout Magazine May 9, 2018
Joelle Faulkner was recently included as a Woman to Watch in the latest issue of Women in Agribusiness‘ quarterly journal. When asked what advice she’d give for someone following her path, she says:
“Every time you say yes to something, you need to say no to something else, so it is important that you decide what is critical for success. In our case, it was critical to determine how to share value between our farm partners and our investors in a way that creates value so that both parties end up better off than they were without the other. Maintaining that view and partnership structure, however, has not been easy because much of the world operates with the idea that more for me has to be less for you.”
Follow this link to read the full interview: Woman in Agribusiness Q1 2018
Area One Farms is pleased to announce that it has qualified to become a signatory and has signed the United Nations-supported Principles for Responsible Investment Initiative (UN PRI).
Founded in 2006, UN PRI is a network of global investors committed to working together to put principles of responsible investing into practice. Signatories follow a set of six principles that protect the environment, benefit society, and promote sound governance through integrity and transparent reporting.
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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.
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For those concerned about the future of Canadian farming, the inability of farmers to capitalize their own farm is a serious issue.
Land ownership is the most stable and lucrative part of farming; without a pathway towards it, many people who want to farm will inevitably choose other business opportunities, typically outside of their communities.
The future of family farming in Canada thus depends on farmers accessing the kind of farmer-centric capital that puts them in a position to own.
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The scale and cost of modern operations are changing Canadian farming. Land, machinery, and inputs require such large capital investment that farmers are left asking fundamental questions: How will they purchase enough acres to give their children the farming opportunity that their parents provided? How can children ever accumulate enough equity to build a farm themselves? What will it mean for future generations of family farmers and their communities if institutional investors make a landlord tenant model the new norm in Canadian agriculture?
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Reports this week out of Saskatchewan tend to group farmers in two opposing categories. Farmer ‘A’ is an older farmer who wants to sell his farm. Farmer ‘A’ supports pension fund ownership of farmland because bigger investors drive up the price of farmland. Farmer ‘Z’ is a young farmer looking to buy into a farm. Farmer ‘Z’ wants to restrict large institutional investors to keep land prices low.
This simple story may sell papers, but it misses the bigger picture.
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Last week, Saskatchewan’s government announced that it is restricting pension funds and other investors from purchasing farmland. Saskatchewan has nearly half of Canada’s farmland. The Canadian Pension Plan Investment Board, the group most effected by the decision, is Canada’s largest institutional investor. So it is no wonder that the decision has people talking. The question is whether people are having the right conversation, because whether pension funds are allowed to invest in Saskatchewan or not, Canadian farmers are facing a financing crisis. Farmers cannot get access to the right kind of capital to build stable farms. Now is the time to change that.