Photo by WinterForceMedia
As the population expands, the need for agricultural land is driving investment in what could be the future’s most precious resource: soil.
According to the Intergovernmental Panel on Climate Change, arable land on Earth will diminish by 30 to 50 per cent over the next century. That’s a lot when you consider that a mere 11 percent of total land area is arable. Even more daunting when pitted against a global population that is predicted to reach 9 billion by 2050.
This year in Saskatchewan, a corporation called One Earth Farms emerged with plans to lease upwards of one million acres of First Nations’ land for agricultural use. If successful, it will become the largest farm on the continent, and potentially the world, giving First Nations communities a definitive role in the management of one of our planet’s largest swaths of arable land.
Globally, the increasing scarcity of arable land has prompted companies from China, South Korea, and many of the OPEC nations to buy up land in breadbasket regions of Africa and Southeast Asia to secure a financial future in food. These acquisitions have often been accompanied by conflict. In Madagascar, for example, Daewoo’s negotiations for 1.3 million hectares of palm oil plantations reportedly fueled political conflicts that led to the overthrow of the government in March of 2009.
Unlike many foreign investors in large-scale agriculture projects in the developing world, One Earth has set up an inclusive board of directors with strong First Nations representation in management. In addition, it offers company equity to landowners involved in the project. For many, One Earth Farms marks the First Nations community’s reclamation of agricultural land in North America. For others, it is viewed as another step in the corporatization of Canadian farmland.
In the spring of 2009, Eric Sprott, billionaire, financier, and CEO of Sprott Inc., shifted his investments into agriculture. Sprott Resource Corporation, headed by Sprott’s protégé Kevin Bambrough, is the sole financial backer of One Earth Farms and has invested $27.5 million in the company. I sat down with Bambrough at the Sprott headquarters to talk about the project. For Bambrough, wealth preservation is only achievable through investment in resources.
“We are coming into a time in history where paper money is at an incredible risk of being devalued,” he says, leaning back in his chair. “You have to forget about the novel value of things, and you have to start looking at the relationship that real things have to each other.”
Appropriately, our conversation is taking place in Sprott’s “Money Room”, where framed paper money – including a Zimbabwean 100 trillion dollar bill – adorns the walls, and a coffee table full of antique coins supports our glasses of sparkling water. In here, money serves a purely decorative purpose.
Resource investments have driven the economic success of Sprott Resource Corp., which reported net profit of $134.2 million in fiscal 2008. In the past, Sprott has focused on energy and mineral resources, investing in Waseca Energy, PBS Coals, and Stonegate Agricom.
Bambrough’s quest for resources led him to Blaine Favel, an MBA graduate of Harvard’s School of Business, and former Grand Chief of the Federation of Saskatchewan Indian Nations (FSIN). Favel was intent on creating a responsible business model for resource development on First Nations land that would include First Nations stakeholders every step of the way.
“I tried to design a company, with the strong support of Sprott Corporation, that would be respectful of Indian people,” Favel says. “The whole mandate was designed on improving their quality of life over the long term.”
Favel came up with the idea to start One Earth Resources, an investment company that would look specifically at resource development and capacity building in First Nations communities across Canada. He took the idea to Dale Awasis, Chief of the Thunderchild First Nation in Turtleford, Saskatchewan, who agreed to discuss a joint venture with Bambrough.
“We had a really good meeting with Kevin, who gave the directive to Blaine to come up with the ultimate deal for First Nations people,” Awasis recalls. “Basically, they were trying to cut out the middleman in negotiations with these investment companies, so I was sold on it right away.”
Bambrough and Favel went out to assess various reserves’ resource value, expecting to find opportunities in potash, or maybe oil and gas. Instead, they found an abundance of land that had been historically undervalued and environmentally degraded.
Seeing an opportunity where they could feasibly acquire the land and restore it to health while employing First Nations people, they decided to start One Earth Farms.
Landing a deal
Most opposition to the project has come from non-native farmers who had been leasing the land from First Nations landowners before One Earth came into the picture. Darrin Qualman, of the National Farmer’s Union, is against a corporate entity like One Earth moving in on the family-farm model that he feels defines Canadian agriculture.
In this case, the company is offering First Nations landowners more money to farm on their land and providing them the opportunity to work for the company. For Favel, it is a significant improvement from the system that was previously in place.
“In some cases, the communities were being paid only a third of the market prices. Typically, the leases were on one year terms, so the farmer had no incentive to put a lot of nutrients back into the soil,” Favel explains. “The First Nations land was basically being mined for its resource, for its yields. It was an extractive and exploitive process.”
One Earth Farms has proposed a project that would allow First Nations communities to collectively lease their land over five- to ten-year terms at fair market value. In addition, the company offers stock equity as a bonus and is developing training and education programs to further Aboriginal careers in business and agriculture. To ensure that the land is healthy and viable over the long term, the company has committed to self-declared sustainable farming methods and is hiring third-party agronomists to produce annual reports on the environmental health of the land.
The model proposed by One Earth Farms is not only unique in the sheer size of the potential land it could unlock, but also in its mandate for sustainability, and the inclusive nature of the board. Favel is Chairman of the board, and Garan Rewerts of the Poundmaker First Nation is the company’s Farm Director.
Clint Davis, President of the Canadian Council of Aboriginal Business (CCAB), views the project as promising in this regard.
“We’re talking about a partnership where First Nations people are utilizing their own land as a significant asset for economic benefit in a sustainable and responsible way,” he says. “The fact that Aboriginal people are equity owners and are integrated in the operation is significant.”
Responsibly farming one million acres of First Nations land in an environmentally sustainable manner is a tall order for any company. And for One Earth Farms to be successful, any commitment to sustainability will have to consider both the social and environmental implications of running what could become the world’s largest farm.
Chief Awasis sees One Earth Farms as a prime opportunity to utilize Thunderchild’s 120 thousand acres of reserve-status land for the band’s long term economic gain.
“We have the land, but it is the capacity that we are lacking,” he stresses. “We entered into a deal where they bring the investment dollars for building agricultural capacity, and eventually…we would manage and maintain our own lands.”
For Chief Clarence Bellegarde of the Little Black Bear First Nation in Goodeve, Saskatchewan, the appeal of One Earth Farms lies in the company’s training program – a viable solution to the community’s unemployment problem.
“It’s not just offering jobs like stone picking, or bale picking,” Bellegarde says. “There are opportunities for financial and administrative training, even management. This partnership would allow our people to fit into the corporate structure.”
Set to launch in 2010, through the University of Saskatchewan and other local institutions, One Earth Farms’ training and education programs are designed for “career progression”, according to the company’s CEO and President, Larry Ruud.
Job creation and capacity building have been promised to First Nations communities in the past, but many partners often come up short in their ability to create lasting wealth, training for niche jobs that are term limited and location-dependent, according to Chris Henderson., Executive Director of the Delphi Group and President of Lumos Energy.
“In order to have an enduring impact, you have to look at the full range of Aboriginal involvement in terms of services provision in the enterprise,” he says. “Management positions are key. That’s how you create real portability of an asset.”
Bambrough seems sincere in his commitment to the social mobility embedded in One Earth Farms’ corporate structure. “We all have a goal here of being replaced,” he says. “My greatest pride in this project will be the day I retire and am replaced by a First Nations person who has come up through the system.”
It is one thing to develop the programs, and another to attract people to them, notes Clint Davis.
“Simply because these programs exist doesn’t mean there [will be] huge waves of Aboriginal youth clamoring for the opportunity,” he says. “There has to be good marketing and outreach to the young people in these communities to ensure that agriculture is a viable industry and a viable career opportunity for them.”
In many ways, over the last few decades, agriculture has proven to be a hard sell to Canada’s youth. Glen Snoek, a Senior Policy Advisor with the Canadian Federation of Agriculture, sees One Earth Farms as a welcome addition to a population of farmers with an average age of 53. “There is no one left to farm the land,” he says.
Blaine Favel believes that First Nations communities will take up the challenge. “This is the only business where the Indian people can start a company and be the biggest in the world, and that has given us a great deal of pride,” he says. “The ability to make food will be a highly valued skill.”
The sustainability of scale
When speaking about corporate farming, questions of environmental sustainability must inevitably enter the discussion. While One Earth Farms has claimed a commitment to sustainability in its mandate, only its practices will determine its sincerity over the long term.
Dr. Angela Bedard-Haughn, Professor of Soil Sciences at the University of Saskatchewan, stresses that soil and water conservation methods are of key concern when speaking about sustainability in the prairies. “Here in Saskatchewan, we have large regions of the province that are prone to drought,” she explains, suggesting soil conservation methods like zero tillage, which Larry Ruud says One Earth will use. (Zero tillage leaves the “stubble” of the crop behind after the harvest, trapping moisture and soil nutrients for the following season.)
Despite the good intentions of One Earth’s mandate, operating an agricultural project of such proportions contravenes conventional notions of good environmental practice. Large farming operations risk getting caught up in checks and balances and often lose sight of their sustainable mandates, according to David B. Brooks, Senior Advisor for Fresh Water with Friends of the Earth. “The evidence is rather against it,” he says. “Not that you can’t design it that way, but that almost inevitably management gets caught up in productivity concerns.”
Ruud admits that the balance between commodity farming and ecology is not an easy on to strike. “To make a wholesale shift away from fertilizers or weed and pest control measures is a recipe for economic disaster,” he says. “But incorporating natural fertilizers and multiple species in our pastures [will] help build the economics of the business and the overall health and productivity of the land.”
Stepping up to the plate
With the stage set for arable investments worldwide, and climate change slowly pushing agricultural yields to the poles, Canada stands to play an important part in providing food to the world, with the prairies centre stage. First Nations farmers could become exemplifiers of best practice in a growing sector, if One Earth is successful.
Calvin Helin, author of Dances with Dependency, sees One Earth Farms as a noteworthy step in the right direction. “It is a very exciting time, and I think that Canada needs to do this,” he says. “I think this gives Aboriginal people the opportunity to control their own destiny and their own resources in a way that is consistent with their own environmental and social values.”
For Chief Awasis, the project will define First Nations people as providers in an essential industry. “Before, we didn’t have a face in agriculture, but in elevating ourselves in this industry we will have an impact,” he says. “I think there will be a lot of eyes opened when people start realizing what First Nations people can bring to the table.”