The Carney government’s Canadian investment summit in Toronto this September was loudly trumpeted as an event that could help drum up $1 trillion in investment in Canadian assets.
But another investment forum quietly followed in its wake: the inaugural Canadian Agriculture Investment Forum in Toronto on Oct. 2.
And its focus was no less ambitious: Canada’s nearly $760 billion in farmland, most of which remains in the hands of farm families.
The forum brought together leaders in finance, agriculture, government and technology. It was closed to the media.
But Kent Willmore, the event’s organizer and CEO of farmland asset management firm Crescero Natural Capital, spoke with Canadian Affairs days afterwards. He shared his ideas on the scale of the investment opportunity, the challenges facing farm families today, and what is needed to boost agricultural productivity while maintaining the health of Canada’s farmland.
This interview has been edited and condensed for clarity.
AK: What were you hoping investors would take away from the forum about the opportunities in Canadian agriculture?
KW: The goal was really to bring agriculture to Bay Street.
AK: How much Canadian farmland is currently held by institutional investors or investment funds?
KW: Less than one per cent of farmland in this country is institutionally owned.
It is such a small amount. More than 99 per cent is owned by farm families and farm corporations. There are about 190,000 farms in the country.
[This is Crescero Natural Capital’s estimate based on the approximately $4 billion in assets under management with dedicated Canadian farmland investment managers. Willmore says the estimate refers to farmland value.]
AK: How significant is the generational transfer of Canadian farmland expected to be over the next decade? And what role do you expect outside investors to play in that transition?
KW: The average farmer is about 60 years old. If you want to transfer your assets before you’re 70, there’s hundreds of billions of dollars of farmland that has to change hands.
In a perfect world, the children would buy the farm, and you wouldn’t need any outside capital to help with that solution. But it’s not a perfect world, and we have a lot of problems with our younger farmers transitioning. Only 12 per cent of [farms] have a written transition plan in place. It’s not that they don’t want a transition plan, it’s that they just don’t have a good solution for how to pass the farm on.
Having outside capital come and help with unique solutions — whether it be through unique lending solutions or temporary capital to help the farm transition — we need those solutions.
AK: Were any concerns raised at the forum about unintended consequences of increased institutional investment in farmland?
KW: Farm families often raise that concern. Governments have raised that concern. We have provincial governments that have put policies in place, and the federal government has looked at this and studied it.
I think it’s right that they should be concerned. Soil is a living organism, and if you don’t take care of it, if you don’t protect it, then you get to desertification, which is basically mining the soil, degrading it to the point where it can’t produce anymore.
There needs to be an incredibly powerful symbiotic relationship between investors, farmers and the land.
AK: Do you think that most investors are able to connect productivity back to soil health?
KW: Without translators, I don’t think they would understand that relationship. That’s why it’s important to have translators, if you will, in place that are working between investors or capital and farm families.
There are investors that maybe don’t care, and there’s a lot of investors that do care. The idea is to work with investors who do care, who understand that by improving their productivity and soil health, you’re actually improving the productivity of the crops they produce, which indirectly improves the value of the land.
AK: What policy changes or barriers came up in conversations with investors, and what would they like governments to do differently to facilitate investment?
KW: I think the federal government is doing a really good job on exciting and incentivizing investment in our country. It’s pretty timely because if you look at agriculture, about 62 per cent of our agri-food and seafood exports go to the U.S., and that is a country with about 350 million people.
We could look at that as, ‘Oh, that’s a big concern because we’re dealing with Trump and his government and tariffs.’ But the federal government has kind of spun that on its head and said, ‘You know what? Yeah, we get that’s a concern, but there’s seven billion people in the world that would also love our products.’
At the same time, we have some provincial governments that are considering limiting investment in agriculture, especially in terms of ownership of land. And we have other provincial governments who have limited it.
AK: You called farmland a ‘foundational real asset in portfolio construction’ in the forum agenda. What does that mean in practical terms for the ownership of Canadian farmland?
KW: It’s one of Maslow’s hierarchy of needs. Humans must eat. We must have food, and what produces that food is farmland. Farmland was the original investment for humans, really, and it will continue to be a foundational asset to our survival on this planet. It’s also a real asset that has performed well and continues to appreciate in value.
[Farmland is being lost] due to desertification and expansion of our cities all around the world. The only solution to solve that problem is to improve the productivity of every acre we have.
When you improve the productivity of an acre of land, that ultimately accrues to the value of the land. So as an investor, it would probably feel good to invest in something where you have no option but to improve its value. With that comes a lot of responsibility.
