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Financing the farm to feed the globe

Area One Farms founder Joelle Faulkner believes it’s just a matter of time before Northern Ontario becomes ripe for agriculture development, but farms need access to adequate financing to make it happen.
Joelle Faulkner of Area One Farms believes Northern Ontario can become a key agriculture area in the ongoing effort to produce more food globally, but adequate financing is needed to help farmers expand and stabilize their operations.

As the need for more food ramps up around the globe, Joelle Faulkner believes there has never been a better time to invest in agriculture in Northern Ontario.

The North has one of the biggest assets that other jurisdictions are missing: rainwater. That gives the area a huge advantage when it comes to cash crops, Faulkner said.

“(Northerners) don’t appreciate it because they don’t need to, because rain comes too commonly, relative to other places, but from a crop perspective, that’s a huge, huge win,” said Faulkner, president and CEO at Area One Farms.

“So when we look at financing the growth of farms in Northern Ontario, we're really looking at how Northern Ontario can contribute to a world food issue, or what will become a world food issue, and how can we most effectively use this really amazing resource that is rainwater.”

Since its founding in 2012, Area One Farms has been financing farming operations across Canada, taking on projects that the banks or funding agencies won’t.

Assistance from Area One Farms enables farmers to expand their operations without paying fees, rent or interest, and the firm tailors partnerships to meet the needs of individual farmers and their operations.

Backers invest in property acquisition, land improvements, or equipment, and the farmer is able to maintain financial stability while growing the business. Profits are shared between operators and the investors.

Most of Area One’s investments to date have been in Alberta, Saskatchewan, Manitoba and southern Ontario, but Faulkner believes Northern Ontario — in particular, the Clay Belt stretching from Kapuskasing to Rouyn-Noranda, Que — could experience the next big farming renaissance.

Talented farmers, an interested and supportive government, and good infrastructure via rail and road are all assets that make the North a prized region for agriculture, Faulkner said.

“It has a completely sustainable water supply for potentially massively increasing feeding what is going to be a hungry world, and because of the rainwater and the infrastructure, it can do it at really low cost,” she said.

“So then the question becomes ‘How do we find the capital to do that work,’ and that's what we've been working on.”

In the last 18 months, the southern Ontario-based investment firm has raised $45 million and applied it to farms across the country. Faulkner’s goal is to raise “five times that amount” over the next 18 months.

Faulkner praises funding programs under the Northern Ontario Heritage Fund Corp. and FedNor that distribute capital for tile drainage and land clearing projects. But “thoughtful capital” directed at helping farmers run successful operations is largely inaccessible, and traditional funding programs aren’t always designed to fit the agriculture industry, she added.

“It’s not that it doesn’t exist, it’s that it doesn’t suit the somewhat less predictability of farm income,” she said. “And so alternative thinking on how capital can be structured is important.”

Though there are other financing firms that will purchase land and rent it out to farmers, Faulkner believes that doesn’t offer the same value for the farmer. Area One Farms’ approach is unique in that its founders are farmers themselves and understand the intricacies of working in an industry with a sometimes unpredictable income.

Faulkner and her brother Benji founded Area One Farms after their family’s own experience trying to expand the family farm. Based in the London area, the family has been involved in agriculture for more than 75 years. They own and operate London Dairy Farms, London Dairy Supply, ProRich Seeds, and Sequin Farms.

About a decade ago, the family had an opportunity to buy a neighbouring farm and expand their operations, but they didn’t want to take on any more bank debt and couldn’t find any investors to finance the expansion. So, they passed on what they say was a great opportunity.

Area One Farms was born out of a desire to help other farm operators negotiate deals to keep their operations running. It’s currently working with nine operators and is in the process of bringing on a 10th; Faulkner said they typically work to bring on a few new farmers every year.

Though Area One Farms has yet to solidify any partnerships in the North, Faulkner believes it’s just a matter of time before it happens.

“I think that Northern Ontario will get really well developed for agriculture over the coming years because there’s such a big global need and there are such good resources,” she said.

Key to that development is continued government support, promotion of the area and agricultural research, and especially finding “the right capital to help increase agricultural production because it will increase the stability of the community.”