The Chinese are coming by the hundreds — and buying land, our farms and wineries

The Chinese are coming by the hundreds — and buying land, our farms and wineries

By Ian Cumming

It’s easier not knowing and then you can say it’s not so.

Chinese investment in Canadian agriculture, whether it be farming or processing, was detailed in Mandarin, in Hamilton, in mid-February to about 70 investors, but the farm leaders stayed away.

Yet some sent your money to sponsor the event, as they have from the start several years ago.

Dairy Farmers of Ontario chairman Bill Emmott and CEO Peter Gould were about a 30-minute drive away, whether at home or office, but it’s far easier to stay away and then say Ian Cumming is making it all up about the Chinese buying farms, including dairy. "We’re certainly not aware of any of this happening," Gould told a fellow reporter recently.

Not aware?

Gould needs to talk to people at Agriculture Canada, OMAF, and the Ontario Federation of Agriculture who are listed in the Mandarin meeting documents as sponsors for this seminar. There are also some federal and provincial officials sitting on the board of directors of this Chinese-Canadian based organization, along with agriculture lawyers and multinational agribusiness specialists.

Another sponsor is an organization that contributes a healthy dose of funds to research at the University of Guelph and to Agriculture Canada for China trade missions. This organization states that its end goal is to produce food here in Canada to ship to China.

Not aware?

The Canada-China Agriculture and Food Development Exchange Centr, based in Hamilton, also has offices in Saskatoon, Calgary and Vancouver and is in the process of expanding into the United States, partnering with institutions and government.

You can pass all the irrelevant rules you want, about the person on the milk licence having to live within 10 km of the farm producing milk. That little hiccup was dealt with at this Hamilton seminar for Chinese investors.

You simply invest in the farm, by either taking over the mortgage or helping it expand, and keep the former owner or another Canadian on as farm manager and on the milk licence, noted Youming Zhao, president of the development exchange centre.

Certainly, investors can’t exclusively ship the products manufactured from this particular milk back to China at the moment, but patience for the end game is a Chinese virtue. They know that in the meantime no democratic government will dare to restrict where and how investment money flows.

The model is there for all to see. The $12 million winery they bought was toured that afternoon, bringing the number of wineries they have purchased to 31. Eighty per cent of the wine they produce is now exported straight back to China. The original owners are front and centre, running the operation.

No one from this side has taken the foot off the accelerator in regards to building that milk powder plant in the Toronto area. Nor is there any easing off on the ongoing meetings with the federal government to set up super-sized Ontario dairy operations for Chinese operators to produce without quota, process the milk here, and ship the various products to China.

If building huge Chinese-owned mega farms in Ontario meets with delaying tactics by scared politicians and government officials, which it has, the already built and operating big, state of the art Ontario and Quebec dairy farms will suffice for investment at the moment.

"Melt into the background," was Zhao’s advice to Chinese investors at the seminar.

You might not see them, but they see you. More than you will ever know. They admitted, indeed, highlighted, at this seminar that they’ve made investment mistakes and learned their lessons. There were several poor land investments in Saskatchewan and Northern Ontario and there was that grape juice factory that was supposed to be a winery.

About 60 per cent of proposed farms and agriculture processing units that they look at buying now are rejected, after a detailed analysis of past and future profitability and effectiveness to their end goal, Zhao said.

Most investments are made for the long term. The real estate person at the seminar told us that the last two 200-acre Ontario blocks of farmland he sold them brought $21,000 and $24,000 per acre.

My friend and former dairy farmer Denis St Pierre made the trip to Hamilton with me. His subsequent research found that a Quebec firm is probably doing even more business with incoming Chinese investors. The Quebec firm can’t keep up with investor interest. The Quebec folks have 850 Chinese flying in next month, looking to invest.

Just so you’re aware.