Farm Credit Canada has committed to a $2 billion investment by 2030 to advance agriculture technology innovation across the country’s agriculture and food industry.
The funds come from FCC’s new investment branch FCC Capital, which offers solutions that hope to bolster the growth of the Canadian agriculture industry.
FCC Capital Vice President of Strategic Finance and Business Development Graeme Millen says the decision for FCC to begin investing was a natural one as the organization has always pushed its mandate to enhance the Canadian agri-food sector.
“ I’ll go back to the underlying philosophy of FCC’s announcement, which is to leverage the fact that we have a large, strong balance sheet, and a mandate to enhance the Canadian agriculture and food sector,” he says.
Millen says eligible companies to receive investments are primarily private companies, specifically those involved with, or have “demonstrated clear potential” to enhance Canadian agriculture.
“ I think not only is that FCC’s mandate, but it also, and frankly more importantly, reflects our sincere belief over of the team and the organization that there is an incredible opportunity presented by supporting the development and adoption of innovation within the sector,” he says.
Millen argues that while of course, as a crown corporation, FCC has an obligation to focus on its mandate; however, supporting investments after the fact is just as important a factor as signing the cheque.
“While being on mandate is necessary, it isn’t unto itself sufficient, and so the second piece is we really are looking for exceptional businesses which have the ability to drive outsized impact and results that’s relevant because this [is] capital, it’s not grant funding,” he says. “To be an enduring platform that can continue to drive this incredible impactful capital into the market – it also needs to be that which can generate returns, so again, we look for those businesses which stand out, that we can put the strength of our balance sheet behind and really help drive their success.”
In its first year of operations, FCC Capital has already built itself a foundation after closing nine direct investment deals, amounting to $170 million. Millen points to three investments in particular, being a biological crop input company out of Vancouver, Three Farmers Foods, and Ground Truth out of Saskatchewan.
“We made an investment in Three Farmers, which is a well-known company which produces snacks with most of their supply coming from Canadian growers, so when we think about opportunities to invest in innovative businesses that also enhance the market for Canadian grown products, that’s a great example,” he says. “ Maybe a third would be a Saskatchewan based company – Ground Truth which is a great technology which can meaningfully increase the visibility for growers and the supply chain in terms of the quality of harvested crops.”
“ I think in all of these cases, just illustrating that there’s such a profound opportunity to create enduring value for growers from a few different perspectives,” he adds.
When it comes to results, Millen says some of the most exciting news is that the investment branch has already given FCC access to a “much broader set of investors” so expectations for the future are high.
“ If I stare into my crystal ball, the great news is I don’t even have to look very far, what’s been really exciting to observe again, both in the last year in terms of some of the activity of what we’ve been up to and even since the day of the announcement, is we’ve been able to garner attention and interest from a much broader set of investors,” he says. “ So when we talk about generating notable change, I’d argue that we’ve already seen it.”
Still, Millen maintains that significant results do not happen overnight so most of the tangible impacts will be felt in the near future.
“When I think about the timelines, there are some that we will support that will have impact, whether that’s in the field, whether that’s in the market, in the growing season that lays ahead and I think it will take time for those outcomes at sort of an individual company level,” he says. “ That kind of momentum, that kind of impact, that takes some time, but we’re not talking decades. I do believe we’ve already seen the benefits of it infield today, and we’re gonna see that build and build, I think month by month, year by year.”
FCC maintains they are 100 per cent invested in Canadian agriculture and food. You can read more about FCC Capital and its projects here.
