A Toronto investment firm will put up millions to consolidate farmland belonging to First Nations in Saskatchewan and Alberta as a “large-scale, fully-integrated corporate farming entity.”
The farming company, to be named One Earth Farms, would use the $27.5 million investment from Sprott Resource Corp. to “establish operations, fund working capital and support its initial growth.”
“We believe that the opportunities associated with this new venture are unprecedented in the agricultural industry,” Sprott CEO Kevin Bambrough said in a release Thursday.
“We intend to build a long-term, profitable agricultural business in partnership with the First Nations, which will improve the management and environmental sustainability of First Nations’ farmland as well as benefit their peoples through increased revenue and job opportunities.”
One Earth Farms’ access to large tracts of First Nations’ farmland, positions the company to become “the largest, most efficient operating farm in Canada,” Sprott said.
Management said it has designed a program to begin farming in a “hub and spoke” system, designed to seed crops and ranch lands in annual increments, beginning with an initial minimum target of 50,000 acres in the first year of operations.
Sprott said the timing for this venture is “opportune” as worldwide, arable land continues to decline, fresh water remains in short supply and various farming regions experience severe, recurring droughts.
Furthermore, the firm said, the worldwide credit crisis has impacted the financing available to farmers and will negatively impact crop production in the short term
These factors “are creating food security issues and in turn fueling substantial farming investment demand globally,” Sprott said.
One Earth Farms’ deal so far involves the Muskowekwan, Starblanket, Little Black Bear and Thunderchild First Nations in Saskatchewan, and several others in Alberta, according to Little Black Bear’s chief Clarence Bellegarde, speaking Thursday to CBC. His community alone will put up about 22,000 acres, the broadcaster reported.
One Earth Farms also plans to set up job training programs for First Nations persons, which Sprott said would help train the next generation of farmers and provide One Earth Farms with a pool of qualified future employees.
One Earth Farms’ executives, who Sprott named Thursday at a project launch in Saskatoon, come with significant pedigrees in Prairie agribusiness.
The new company’s CEO will be Larry Ruud, a farm management consultant who also operates a farm near Vermilion, Alta., works for Meyers Norris Penny and is also a director on the board of grain company Viterra.
“With large tracts of high quality land, Western Canada provides significant opportunity to develop a large, efficient and profitably managed corporate farm,” Ruud said in Sprott’s release.
“We intend to build an industry-leading business based on environmentally sustainable practices, respect for the First Nations peoples and a culture of excellence which extends across the One Earth Farms organization.”
The new operation’s chief operating officer will be Fred Siemens, a former CEO of the Winnipeg Commodity Exchange and national supervisor of grain futures trading for the Canadian Grain Commission.
Siemens has also been a part owner of an Alberta-based commodity brokerage specializing in agricultural risk management and has also worked at Meyers Norris Penny.
Sprott’s chairman, Eric Sprott, will be chairman of One Earth Farms, while Blaine Favel, a former grand chief of the Federation of Saskatchewan Indian Nations, will be a director with One Earth Farms and will chair One Earth Farms GP Corp., the manager of the limited partnership through which First Nations’ land will be leased and farmed.
“Off the hook”
According to Sprott, One Earth Farms aims to “initiate strategic industry partnerships, either through preferred supply relationships or preferred long-term sales agreements, for its production.”
Ruud was quoted Thursday by the Reuters news service as saying news of the project has generated interest from other First Nations, which have had One Earth’s phone “ringing off the hook.”
The project, Ruud told Reuters, stemmed from discussions Eric Sprott held years ago with some aboriginal leaders about potential investment opportunities.
Not all the land the company has agreements for can be used now, because it’s currently being farmed by other renters, but that will also allow the company to “phase in” its operations, Ruud said.
The company told Reuters it has either lease agreements or signed letters of intent to lease with 18 First Nation bands in the two provinces.
One Earth Farms said it has also engaged Cormark Securities on a financial advisory basis to explore options for raising third-party capital.