Steve Ladurantaye
Globe and Mail

The renowned cranberry harvest in southern Quebec has long attracted tourists to the picturesque region. But the cranberry bogs sprinkled throughout the countryside near Victoriaville attracted a different type of sightseer earlier this summer – a billion-dollar, U.S.-based agriculture fund hungry for cheap Canadian farmland.

Attracted by the Canada’s low political risk and fertile fields, Hancock Agricultural Investment Group, a Boston-based unit of Toronto’s Manulife Financial Corp., decided its first Canadian purchase would be an 1,100-acre (450-hectare) patch of land that it called “one of the most highly productive properties in the industry.”

The company will not disclose how much it paid, or even the exact location of the farm. But president Jeff Conrad said the company is in Canada to stay, and the fund plans to seek more land.

“A lot of people get uncomfortable because they don’t know us and they don’t know how we operate,” he said. “We aren’t in this to flip properties, and we’re not fast money. Our clients are long-term, institutional firms – pension funds – and they have a place in their asset allocation for farmland.”

According to a report by London-based Knight Frank LLP, Canadian farmers can expect a flurry of international interest in the coming months as investors bet that low commodity prices will rebound as the world struggles to meet its need for food. Canadian farmland is still cheap by global standards, but unlikely to stay that way for long.

Large global funds are increasingly drawn to Canada and Australia as they seek agricultural investments, with a hectare of arable land in the Canadian Prairies worth about $1,725 (U.S.), according to data collected at the beginning of the year, said Knight Frank’s head of rural property research, Andrew Shirley. Comparable land in England goes for $17,100; in Australia, it’s $3,450.

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