Area One Farms Review 2021: Best Farmland Investment?

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Area One Farms
  • Minimum Holding Period
  • Sustainability
  • Investment Opportunities
  • Transparency
  • Customer Support
3.7

Summary

Area One Farms is a unique investment platform dedicated to Canadian Farmland. The company creates partnerships with farmers to buy farmland, expand existing farms, and maximize efficiency of farming.

The company offers investors access to participate and become equity holders of the farmland.

One of the main benefits of investing with Area One is the alignment that is created with the farmers who act as the operators of the farms.

It is important to note that Area One farms is limited to accredited investors only. They also have a minimum holding period of 10 years.

Pros

  • Access to equity in Canadian farmland
  • Passive investment opportunity
  • Sustainable farming practices

Cons

  • Accredited Investors Only
  • Minimum holding period of 10 years

Many farmers come across great opportunities to expand but have to let them pass by because they lack the cash and can’t take on more debt.

That’s where Area One Farms can step in and make this dream of expansion come true.

Area One Farms operates private equity funds in the Canadian farmland sector. They partner with established farm operators to buy off-market farmland. This is a way to help family farms grow in both size and productivity.

Area One Farms has a mission to make high-impact investments into farmland in the most sustainable and highest value way by forming equity partnerships with top-performing Canadian farmers.

By doing this, they increase their financial returns. Using a uniquely Canadian model, profits and capital appreciation are shared equally by the farmer and investors.

Keep reading for our full Area One Farms Review, but first, let's review the appeal of farmland for investors.

Why Invest In Farmland?

The value of agricultural property grows independently of other asset classes. For instance, the land can be increasingly profitable even when the price of gold (or any other precious metal) drops.

What’s more, for decades, farmland has  proven itself to be a solid investment, faring far better than any other real estate asset. Historically, it simply has not lost value.

There will always be a need for farmland. Population is rising and so is the need for agricultural products. The demand for food increases every year, and the available land for farming shrinks as it is developed for other commercial usage.

Farmland has had a low correlation with other asset classes. The increase in physical crop yields and the addition of higher-value crops raise profits. These factors set farmland apart from other real estate investments.

Also, the market value of farmland has historically correlated with inflation.

There will always be a need for farm products as the worldwide population increases steadily.

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Why Canada Is Known For Farming

Canada’s 7.5% per acre land appreciation that has happened during the last 70 years is driven by factors that are likely to keep going. These include physical yield increases and farmers being able to plant more profitable crops.

This is a little-known fact: farming is Canada’s primary industry.

Here’s a breakdown of what Canadian farmers produce:

  • Grains and seeds represent 34%
  • Livestock is 24%
  • Dairy products are 12%
  • Various vegetables and fruits are 9%
  • Eggs comprise 8%

Canada has a long list of advantages for farmers and their investors, including:

  • Reliable rainfall during the growing season reduces the need for expensive irrigation systems
  • Deep and rich soils deposited in the region during the last glacial period
  • An unlimited fresh water supply through most of the Great Lakes basin
  • A long frost-free growing season with ample heat for growing the wide variety of staple crops
  • Infrastructure that can quickly deliver farm goods from ports to the global market
  • Highly educated workforce able to plan and manage farm operations efficiently
  • Major urban markets in the surrounding areas that require fresh market produce

Commitment To Sustainable Farming

In recent years, Canadian policymakers have been focused on ways to make farming more sustainable with less of an impact on the environment.

Sustainable farming is the practice of producing food including plant or animal products without harming natural resources and land. One of its primary goals is to promote environmental stewardship both in the present time and also into the future.

It protects the environment in a multitude of ways, including:

  • Less water pollution in both surface water and groundwater from contamination caused by pesticides and fertilizers
  • Using natural water sources rather than building costly irrigation systems
  • Managing soil to minimize soil erosion by putting in place soil conservation practices such as planting on contours and using crop cover on land not being used in a certain season
  • Rotating crops during planting seasons

What Is Area One Farms?

Area One Farms Review

Area One Farms is an investment platform dedicated to farmland, specifically in Canada. The company was founded in 2012 and has since attracted over 150 institutional and high net worth investors.

Area One Farms currently has over $450 million in committed funds.

The company was founded after Joelle Faulkner wanted to expand her family farm but was unable due to the capital investment. Faulkner, founder and CEO of Area One Farms, created the company in an effort to support Canadian farmers and provide access to farmland to investors.

Area One Farms is open to accredited investors only at this time.

Click here to view current offerings on Area One Farms!

How Does Area One Farms Work?

The company brings committed investors and innovative farmers together to invest in land and grow farms while still keeping the farmer as an owner. The focus on increasing the amount of income is improving land value, so that the land is worth more than the total of the investment money raised for it.

Area One helps farmers: 

  • Buy land, machinery, and other necessary supplies to reach optimal scale
  • Make land improvements to maximize productivity, add value, and grow assets
  • Increase profits in both the short and long-term

Area One Farms partners with Canadian farmers – most of them family farms – that are looking to expand. They may find adjacent property for sale, some of it owned by retiring farmers. Once found, the company helps the farmer buy the land. Area One investors then become equity owners in the new, expanded farm.

Investors will get an annual source of income from farm production, such as corn, oats, barley, soybeans and other crops. The company helps pay the farm’s expenses, then distributes earnings to investors.

Investment terms are a minimum of 10 years, so by the end of that term, the land improvements are highly likely to bring on a higher value.

Area One investors join a network of farm partners, suppliers and vendors, and agricultural researchers, all aimed at helping grow the farm’s profitability.

How To Get Started With Area One Farms

If you are interested in investing with Area One Farms, then you can contact their investor team at [email protected] You can also contact them by phone for general inquiries at 416-583-5873.

Click here to view current offerings on Area One Farms!

Pros

  • Sustainable farming practices protect the earth, its natural resources and the environment
  • Passive investing means partners do not make any decisions in day-to-day activities such as buying equipment, land use or transporting crops.

Cons

  • You must be a accredited to invest
  • Investment terms are a minimum of 10 years, which locks investors in and blocks the chance of shorter term gains.
  • Accredited Investors only

Area One Farms Review: Conclusion

The benefits of investing with Area One Farms far outweigh the drawbacks. Area One has a mission and a game plan for helping farmers increase their land and profits. They support sustainable farming practices to protect the land, air and natural water sources.

It is a front runner in the platforms allowing investors to take advantage of the high value and return on investment of farmland in Canada.

Click here to view current offerings on Area One Farms!

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