Earlier this year, Farm Credit Canada (FCC) announced that it convened a 20-organization strong coalition that will invest $5 billion into Canada’s agriculture and food innovation sector by 2030. FCC had previously announced its own pledge of $2 billion by 2030, bringing the total investment to $7 billion. By March 31 of this year, FCC had already made gains on this pledge by deploying $325 million.
The coalition’s investment organizations include:[JC1]
- Area One Farms
- Arterra Growth
- Bonnefield Financial
- District Ventures Capital
- Emmertech
- Glengarry Farm Finance Corporation
- InvestEco Capital Corp.
- Maverix Private Equity
- Nàdarra Ventures
- Northleaf Capital Partners
- NYA Ventures
- Power Sustainable Lios
- Radicle Growth Food and Agriculture Venture Capital
- Royal Bank of Canada (RBC)
- S2G Investments
- Seminal Capital Holdings, LLC
- SVG Ventures
- Tall Grass Ventures
- Tikehau Capital
- Yaletown Partners
Darren Baccus, executive VP of agri-food, alliances and FCC capital, is excited about what this means for Canadians.
“FCC is the only Canadian financial institution wholly focused on Canadian food and agriculture,” Baccus says. “We are bringing capital solutions, but also with the coalition and partners to drive the industry. This is designed to be a self-propelling machine. It gets the ball rolling and attracts more and more investors.”
Baccus goes on to note that, historically, FCC focused on providing senior loans, essentially mortgages, to primary producers supporting the acquisition of farms, farmland and equipment. Over time, FCC evolved to offer a broader range of capital solutions.
“What began as loans for farmers and ranchers has expanded to include senior loans for agribusinesses involved in areas such as shipping, packing and processing, addressing needs across the entire value chain,” he explains. “A few years ago, FCC sought feedback from the industry to better understand its evolving needs. The response was that while FCC’s role as the only Canadian financial institution solely dedicated to food and agriculture was appreciated, the industry required more diverse and sophisticated solutions to keep pace with its growth and maturity.”
The FCC team had a moment of great clarity. It came down to the realization that they were ideally positioned to fill this need with all the agility and flexibility required.
“FCC introduced new offerings alongside its traditional products. These include mezzanine debt, which provides flexible financing options that complement senior loans; and equity investments, allowing FCC to invest directly in companies or through third-party funds,” he adds.
It’s all part of the broader plan backed by the coalition. With a large jumpstart investment, FCC can literally change the game – from entry into the industry to growth to ultimately attracting widespread, global investment.
“The Canadian food and agriculture sector presents immense opportunities, contributing seven per cent to the nation’s GDP and accounting for one in nine jobs,” Baccus says. “As FCC continues to execute its strategy, it recognizes the sector’s importance and yet untapped potential. After all, no matter the circumstances, everyone will always need to eat, making food and agriculture an incredibly attractive investment opportunity.”
The coalition and new direction empower FCC to delve deeper into the role of “concierge,” connecting and networking investors with opportunities in more tailored, customized ways.
Baccus smiles, “In 15 years, producers will have a Rolodex of investment options. They will be able to call us up and say, ‘What can you do for me?’ and we will present them with a vast range of options.”
The long-range impact will resonate up and down the value chain and ultimately envelop the end users.
“A very interesting and important part of this coalition is that the investors are all from different areas of the industry,” says Baccus about how the impact is set to unfold. “We approached investors who were looking at different parts of the industry because the industry itself has capital needs and capital opportunity across a wide variety of interests, including the growing need for farmland succession planning.
“We have some investors that are intentionally looking at supporting inter-generational transitions and the transfer of farmland in ways that provide solutions for farmland to stay in a family or stay within a community.”
He continues, “There are members of the coalition who are focused on driving the best technological solutions for Canadian farmers and ranchers. It’s not generic; it’s not a ‘Hey, we should invest in technology’ conversation. These are investors who are looking for technology solutions that will specifically make Canadian farmers more efficient and more productive.
“We also have part of the coalition that is more traditional private equity, helping businesses become great Canadian businesses and stronger regional players that can expand nationally.
“By putting a coalition together that touches on all the different areas, and I’ve only touched on just a few of them, we’re bringing capital in that is looking for opportunities across the chain: farmland, ag, tech, shipping, packing, processing, infrastructure, business. Not only that, we are also helping the mid-market and smaller producers that traditionally don’t have access to investment opportunities, just as much as we are helping the larger, more national players.”
It is no secret that economically, politically and socially, things are changing – fast. How much of the FCC’s coalition strategy is in response to global unrest? As it turns out, none of it. However, Baccus cannot help but be incredibly grateful that the timing of the coalition and other FCC initiatives are poised to boost Canada globally while supporting its producers from within as the world continues to shift.
“Things changing rapidly became part of the solution in a more organic way,” Baccus points out. “While yes, the strategy was put together through consultation with the industry, what we heard was about the opportunities that Canadian food and ag could have both domestically and globally as we started the execution of this strategy. Then came the global macro events that we are facing, like the tariffs. The industry saw the potential issues ahead of time. The industry spoke up, and FCC listened. The timing was fortunate. At least once a month we look back and say, this is the right strategy at the right time to drive not only productivity but also resiliency.”
The launch of the coalition and its short- and long-term goals will change the Canadian agri-food business. In fact, those changes are already resonating.
Baccus concludes, “We know that $7 billion by 2030 is a realistic time horizon and a realistic dollar amount. We see the opportunity. The world is looking for Canada to step up as the agri-food superpower that we are – and that we need to be. The momentum is rolling and past 2030, we will see investors continually showing up with more capital to keep driving opportunities.”
As the world continues to change, FCC is positioning Canada to thrive and usher in a more stable and innovative food sector that supports Canadians, and ultimately helps to feed the world.
Learn more online at www.fcc-fac.ca.