The seed of what would become One Earth Farms was planted years ago when Kevin Bambrough, the president and CEO of Sprott Resource Corp., was standing in the middle of a sprawling field on the Canadian Prairies. Bambrough discovered that most of the land around him belonged to First Nations, but that very few Aboriginals were involved in farming it (the land is instead leased out). He spotted a rare opportunity to grab a massive chunk of an industry that’s still dominated by smaller, family-owned farms in Canada, but where most of the money is increasingly being made by larger, corporate-run operations.
“What was typically happening is, guys would come in and lease a smaller chunk of land for their family operation,” says Steve Yuzpe, the CFO of Sprott Resource, an arm of the investment firm founded by legendary investor Eric Sprott. “No one thought to take the next step.” That step was to launch negotiations with some 40 different First Nations who control two million acres of land in Alberta, Saskatchewan and Manitoba, and offer them a chance to participate in the business. The goal is to eventually create a giant, one-million-acre operation, scattered over the three provinces, that would rank among the biggest farms in the world.
Launched last year with an initial $27.5-million investment, One Earth now boasts some 93,000 acres under administration, already making it the second-largest farm operation in the country. The farms raise livestock and grow canola, wheat, field peas, oats and barley. There are plans to add flax, lentils and chickpeas.
It’s not yet a profitable enterprise, however. Because of its anticipated size, One Earth faces high start-up and labour costs. Potential revenues have also been impacted by an exceptionally rainy planting season that resulted in only 60 per cent of One Earth’s farmland being seeded.
But it could have been worse. Yuzpe argues that a key aspect of One Earth’s model is that its farms are spread out over a large region, helping to mitigate such weather-related risks.
Not everyone is convinced One Earth’s giant farm will work. Critics point out that One Earth may be geographically diversified, but they still have a lot riding on individual crops. “They have all of this land, so if prices drop they have huge losses,” says Kevin Wipf, the executive director of the National Farmers Union, adding that smaller farms can be more flexible. There are also concerns about the impact big corporate farms have on the land. While Sprott touts One Earth as being more sustainable because the landowners—the First Nations—are participants, others like Saskatchewan farmer and NFU president Terry Boehm note that several companies have tried and failed to manage vast agricultural regions.
Sprott, however, believes the key to farming is size and access to capital—an approach that’s backed up by a 2008 Statistics Canada study that found that bigger farms tend to be more profitable. The company is also hoping to further boost profitability by eventually becoming more involved in the creation of food products that appear on grocery store shelves. “People understand that First Nations have a strong connection to their land and to ‘natural’ and ‘sustainable,’ and those are our beliefs as well,” says Yuzpe. “Down the road, I think there’s a real opportunity to create a real positive consumer brand associated with all of these products.”