Keeping an eye on Communist, Totalitarian China, and its influence both globally, and we as Canadians. I have come to the opinion that we are rarely privy to truth regarding the real goal, the agenda of Red China, and it's implications for Canada [and North America as a whole]. No more can we rely on our media as more and more information on China is actively being swept under the carpet - not for consumption.
Wednesday, January 6, 2016
Chinese immigrants are reshaping Saskatchewan's farmland, [GMO Crops Are Popular]
Seed capital:Chinese immigrants are reshaping Saskatchewan's farmland, [GMO Crops Are Popular]
OGEMA, SASK. — The Globe and Mail
At first glance, Sheldon Zou looks like any other farmer sipping coffee in the dining room of The Little Amego Inn in Ogema, Sask. He wears a rumpled hat, drives a pickup truck and talks earnestly about canola prices.
While most of the other farmers in the café have been tilling soil in the area for decades, Mr. Zou is a newcomer – to farming, to Ogema and to Canada. He immigrated from China in 2008, an entrepreneur with a background in engineering and a brief history of running a broadband company in the U.S. Mr. Zou, 40, was at loose ends at first, shuttling between Vancouver, Calgary and Toronto looking for a business opportunity. But during a drive across Saskatchewan, he became enchanted with the Prairies, and the investment possibilities of farmland.
He took the plunge a year ago, putting down $1.5-million to buy 4,000 acres near Ogema, roughly 115 kilometres south of Regina. Soon he moved to Ogema with his wife Linda, daughters Jennifer and Angela, and friend Alice Jin, who was so new to Canada she had notes with English words plastered around her apartment in Regina. Ms. Jin bought the Rolling Hills Restaurant while the Zous became farmers.
“I am still trying to buy more land,” said Mr. Zou, a landed immigrant, who has rented out most of his property and farms the rest with local farmers who are teaching him the ropes. He hopes to one day manage all the land himself and to recruit more immigrants to Ogema. “I think that if I can teach basic farming to new immigrants, I see an opportunity,” he said. “It’s very easy for Chinese to accept this idea to buy farmland. It just makes sense.”
The Zous are part of a new wave of immigrant investors who are changing the face of Saskatchewan’s countryside. These investors, who come mainly from China, South Korea and India, are buying up farmland, by the hectare, often in cash, and frequently becoming landlords to dozens of local farmers.
Most are motivated by the province’s booming agriculture sector and a sense that Saskatchewan farmland, while soaring in price, is still remarkably cheap. Many are also convinced that the demise of the Canadian Wheat Board’s monopoly over the sale of wheat and barley will open opportunities to sell grain directly to buyers in Asia. For these investors, the plan is simple: Buy up acres of land, partner with a local farmer to grow the crops, and then ship the produce directly to customers in China. The lure is simple too: The possibility of profits from those sales to Asia, and the hope that land prices will continue to rise and drive up the value of their land assets.
That’s all still a ways off, and new immigrants represent only a portion of the roughly 30,000 annual farmland sales in Saskatchewan. But real estate agents say the number of deals to non-residents has soared in the past couple of years and the influx of Chinese immigrants in particular is getting noticed.
“For farmland, especially Saskatchewan farmland, they think it is much, much undervalued,” said Justin Yin, a real estate agent in Saskatoon who immigrated from China in 2004 and specializes in selling farmland to Chinese immigrants in Toronto and Vancouver. “So they think that’s the best place to put their money.” Mr. Yin, who also owns nearly 2,000 acres, has been in business for four months but he already has roughly 100 clients including a group of 10 investors who have put up $20-million and told him to buy whatever he can find.
The influx is creating mixed feelings in many communities. There is a long history of Chinese immigrants coming to Western Canada and good part of it is unhappy: a head tax, as well as prohibitions on voting and on owning farmland. Chinese immigrants still represent only a fraction of the province’s population, but the number has been growing particularly in the past couple of years as buyers arrive by the busload to scout out farmland. While older farmers planning to retire are thrilled to have a growing pool of new potential buyers, many worry about the long-term impact of so many new immigrants arriving with little knowledge of agriculture and often overpaying for farms.
Still others wonder where all the money is coming from.
Saskatchewan has the strictest rules in the country when it comes to farm ownership. Only Canadian citizens, permanent residents and 100-per-cent Canadian-owned companies are allowed to hold title to more than 10 acres of farmland. There are some exemptions and it’s not clear if titleholders can be backed by foreign investors. Whatever the case, the province doesn’t do much checking. Saskatchewan doesn’t even keep track of the number of non-residents buying land and officials don’t probe too deeply into how the transactions are financed or whether offshore investors are involved.
“We check basically what’s on the title,” said Mark Folk, general manager of the Saskatchewan Farmland Security Board, which regulates non-resident farmland ownership. “We do some verifications that they comply with residency [rules]. After that it’s a little bit more difficult to follow up farther than that.”
Mr. Folk said the board often requests passports or permanent resident cards from buyers. And in some cases it requires them to sign a declaration that they are the only owner of the land. But officials don’t go much farther to look into any potential offshore arrangements. There’s nothing wrong with a non-resident having a mortgage with a foreign investor, he said, but that investor cannot have an ownership interest in the property.
While the board doesn’t keep statistics about non-resident purchases, Mr. Folk knows they are on the rise. “There’s definitely an increase from non-Saskatchewan residents purchasing farmland in the last couple of years.” However, “we don’t have any information that would lead us to believe that it’s not their own money.”
It’s easy to see why new immigrants, like many other investors, are attracted to Saskatchewan farmland. Prices in parts of the province have climbed more than 20 per cent in the past year to around $2,000 an acre, according to a recent report by Re/Max realty. Over all, the average value of farmland in Saskatchewan increased 9.1 per cent during the first half of 2012, which was above the national average, according to a report by Farm Credit Canada. With grain prices and farm incomes rising, rural land values are expected to keep going up. And yet Saskatchewan’s farmland is far less expensive than comparable property in other provinces, such as Ontario or British Columbia, which have less restrictive ownership rules. Ontario farms go for up to $15,000 an acre while farms in B.C. can sell for as much as $60,000 an acre.
Buying land that’s increasing in value by roughly 20 per cent annually is one thing. But many of these investors are banking on something else too. If the government ever eases its restrictions on foreign ownership, many believe farmland prices will soar. “It’s a really good bet,” says Tim Hammond, a real estate agent in Biggar who has done several recent deals with immigrants from China and India.
Ogema has become something of a focal point for the buying spree. Plopped along a stretch of open prairie near the U.S. border, Ogema has all the trappings of a classic Saskatchewan town; 368 people, a post office, restaurant, hotel, school, arena and a couple of shops. Many farmers in the area have been working the same land for generations, riding the vagaries of weather that can change from drought to flood in a matter of weeks. Land prices for the most part hadn’t moved much in decades.
That changed a couple of years ago when Andy Hu came to town. Mr. Hu, 38, grew up on a farm in China and immigrated to Canada in 2004, launching a commercial real estate business in Calgary. After a few visits to Saskatchewan, he turned his attention to farmland and launched MaxCrop Farm Canada Inc., a Regina-based company that specializes in finding farmland investors among new immigrants from China and South Korea. “I thought [farmland] was very, very undervalued,” Mr. Hu said in a recent interview. “Also at the same time I saw the strong [interest] by new Canadians to own farmland. Sometimes they come from a country where they were not allowed to own farmland.”
Mr. Hu met with Ogema mayor Wayne Myren, who runs the local Napa Auto Parts store. The meeting went well and Mr. Hu returned a few weeks later with four investors, all recent arrivals from China. They too met with Mr. Myren and talked about farming, land values and the local rail line that makes shipping grain directly to Asia feasible. That became even more crucial to MaxCrop last year after the federal government announced it was ending the Wheat Board’s monopoly. “Their idea was there’s a link now with the Wheat Board gone, they have a flow through right through to China with grain,” Mr. Myren recalled. He explained that there are half a dozen farmer-owned elevators along the line, making it relatively easy to load cars destined for ports on the West Coast. Another option is to truck grain to Regina and send it on a container car to Asia.
Within months, several MaxCrop investors began buying up farms and driving up prices, doubling values overnight in some cases. The company ran ads in local Saskatchewan papers seeking farm sellers, promising a “quick closing” and “no commission.” It also puts ads in Chinese-language papers in Toronto, Vancouver and elsewhere looking for investors.
One ad caught the eye of Terry Tian. He’d immigrated from China to Vancouver in 2008 and got a job working at Wok n’ Roll, a fast-food outlet at the Vancouver airport. He called MaxCrop, came to visit Ogema and ended up buying 800 acres, borrowing $400,000 from his father who has a business in China. Mr. Tian moved to Moose Jaw last year with his wife and two children and he’s now learning to farm with help from a local farmer. “I love it here,” he says with a wide smile. He plans to partner with MaxCrop for the long term and one day find buyers in China for his grain. “I think I’ve got a chance and I’m interested in doing that,” he says.
Long-time local farmers like Keith Bacon are leery about all the buying. He welcomes Mr. Zou and he has met some of the MaxCrop investors. But he wonders about how much they are paying and whether they are in over their heads. “If it was great farmland they were getting, it would have been bought by locals already,” Mr. Bacon said. When asked if he believes the new immigrants fully understand what they they are getting into, he replied: “No. There is some issue there.”
Mayor Myren isn’t so sure either. He is open to new arrivals and said Ogema has been among the few towns in Canada to market itself in China. The town has a Filipino population and counts five different languages among its tiny population. But Mr. Myren has found Mr. Hu’s tactics aggressive at times and he got testy when MaxCrop put his picture on the company’s website without permission.
“I don’t know if it’s good or bad, I honestly don’t,” he said when asked about the immigrant investors. But then he paused and added: “Who’s going to farm the land when our generation is gone?”
MaxCrop has grown rapidly across the province since Mr. Hu’s visit in 2010. The company has attracted roughly 40 investors, all new immigrants, and manages around 70,000 acres across the province. It also operates a 7,000-acre farm, with separate investors, and it is looking into acquiring processing facilities. The company’s plan is to use the connections of its investors to open new markets in China and ship grain directly to buyers, via container ships. It is already working on a deal to ship malt barley grown on the MaxCrop farm to buyers in Shanghai.
“This is the next step for agriculture,” said Jason Dearborn, a former provincial politician who is MaxCrop’s chief operating officer. “We have Mandarin speakers and we have a vision that is going to link us into that marketplace.”
Mr. Dearborn added that MaxCrop is not as interested in land ownership so much as sharing what the land produces with local farmers. The company wants to partner with farmers, get them to invest in MaxCrop, and then work together to produce crops for China. “If you look at the bigger picture, China is the largest commodity buyer in the world. ... For me as a farmer to do this on my own, is really, really difficult. I need partners who understand the language and the nuance. And that’s where this partnership is really coming to fruition,” he said. The company hopes to produce niche products, he added, such as lentils and malt barley, which can be processed and shipped via container to Asia.
Mr. Dearborn is well aware of the concerns about Chinese immigrants buying up farmland. “I don’t see this as any different from what my great grandparents did,” he said noting that his family has been farming in the province for more than 100 years. He dismissed suggestions that MaxCrop’s investors are fronts for buyers in China, saying MaxCrop wants to partner with local farmers, not supplant them. While he has heard some complaints about MaxCrop, the reception has been generally positive “except for a few xenophobic cranky pants.”
“Race and ethnicity should never be a punishment in this country for commercial enterprise as far as I am concerned,” he added. “I think that is a Canadian value.”
Mr. Zou who is not a MaxCrop client, has heard the concerns as well but is convinced people will adjust. “In a couple of years they are probably going to feel more comfortable,” he said. He pointed to his friend Ms. Jin, who runs the Rolling Hills Restaurant with her family and has been embraced by the community, many of whom have helped her learn English.
“Recruiting more immigrants is a good thing,” he added. “I think there’s a benefit for everyone.”
Over the past 15 years, real agricultural output increased 30 per cent while employment in agriculture declined 26 per cent. Canada’s real agricultural output is on track to increase 7.5 per cent this year. Producers are also shifting toward higher-return products other than wheat that are of high demand in developed economies. Canadian growers also benefited from a major U.S. drought this summer.
Average total income of farm families, which includes other income, was $118,970 in 2011 and is projected to reach $123,498 in 2012. It was $106,894 in 2010 and averaged $97,331 between 2006 and 2010. Average net worth per farm is expected to reach $1.7-million in 2012.
Impact of the dollar:
Since the Canadian dollar began its ascent in 2002, the volume of agri-food imports has increased by 64 per cent while the volume of exports has gone up just 14 per cent.
FARMLAND OWNERSHIP RULES:
B.C.: No restriction on foreign ownership. Some of the richest farmland is governed by the Agriculture Land Reserve
Alberta: Only Canadian citizens, permanent residents and Canadian-controlled companies can own more than 20 acres of farmland.
Saskatchewan: Only Canadian citizens, permanent residents and 100-per-cent Canadian-owned companies can own more than 10 acres.
Manitoba: Only Canadian citizens, permanent residents and Canadian-controlled companies can own more than 40 acres of farmland.
Ontario: No restrictions on foreign ownership.
Quebec: Non residents (people who have lived in the province for less than a year) must get permission to buy farmland from the Commission de la protection du territoire agricole du Québec.
New Brunswick: No restrictions on foreign ownership.
Nova Scotia: No restrictions on foreign ownership
PEI: Non-residents must get permission from the government to buy more than five acres.
Newfoundland and Labrador: No restrictions on foreign ownership.