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A focus on value, not price

Agriprocity’s Nicole Rogers is in the U.S. selling an export market plan most farmers north of the border balked at

"In Canada… trade finance is mainly done by some pretty archaic institutions,” Nicole Rogers says. It’s another reason U.S. farmers are the ones to grab new opportunities.

In 2008, Nicole Rogers was living in Dubai and working as a trade attaché for Agriculture and Agri-Food Canada when she connected with several investors in the Gulf region who wanted to purchase Canadian farmland.

The investors wanted large tracts of arable land in the Prairies to grow wheat and pulses that can’t be grown in their desert environment, so Rogers explained most provinces have an embargo against such sales. “It was that direct investment angle that the Canadian government couldn’t or wouldn’t pursue,” Rogers says.

In the United States, foreign investors own almost 30 million acres of farmland or an estimated 2.3 percent of all farmland nationwide; it’s a number that has doubled over the past two decades, according to the latest data from the U.S. Department of Agriculture.

Canadians own 6.87 million acres of farmland south of the border, making them the largest foreign owners of U.S. agricultural land.

Little data is available about the amount of Canadian farmland under non-Canadian ownership but provincial restrictions make it difficult for outside investors to snap up prime agricultural land in Canada, including in the West, where the Dubai group was hoping to buy.

Manitoba stipulates that non-residents, foreign residents and foreign-controlled corporations can own a maximum of 40 acres; foreign investments are limited to a maximum of 20 acres in Alberta. In Saskatchewan, the number drops to 10 acres.

But in a way, that wasn’t what the Dubai discussion was about. At its heart, it was about food security in a world where important buyers are losing confidence that they can depend on the open market to recognize and provide what they need.

In 2013, Rogers founded Agriprocity, a startup with the goal of developing relationships between Canadian farmers and international strategic partners who wanted better, more secure access to wheat and other crops. The goal, she explains, was to act as a hedge for farmers by providing guaranteed contracts for a portion of their harvest.

“The benefit to a farmer as we first envisioned it was like having a high-low security blanket,” Rogers explains. “They would have a contract that they knew could be worth a certain amount of money and it would be delivered every year so they could blend the variability of production with the security of a buyer.”

In other words, it would be an opportunity for farmers who wanted to think about different ways of determining crop value for a portion of their total production.

Rogers believed many farmers would be enticed by the idea of continuing to price 70 percent of their acres on open grain markets, while growing another 30 percent with varieties that have better functionality that would meet buyer requirements for nutrients and yield.

Increasingly, says Rogers, the best farm opportunities are outside normal commodity pathways, and often involve a global component. photo: Supplied

Betting the farm

Rogers grew up in Ayr, Ont., where her grandfather ran a 3,000-acre livestock trading operation that she believes was one of the largest of its kind in Canada; she knew the challenges farmers faced in making a living on the land and how to talk to them about opportunities.

“I think you become really relatable when you’re a farmer; you understand risk really well and develop such great life skills,” she explains. “You develop this ability to just shoot things straight… I think that’s a rural thing, a Canadian rural thing, to condense things and make them really simple.”

In her role as founder and CEO of Agriprocity, Rogers talked to a lot of farmers. The initial reaction to her novel concept was very positive.

Agriprocity partnered with large buyers, and farmers felt confident that the arrangement could be effective for managing logistics and tackling some of the systemic issues with trading grains in Canada while providing new avenues to sell their crops.

“We had about a group of 20 farmers that were awesome,” Rogers recalls. “Not all of them transacted, but the ones that did, I would say they were really pleased with the different type of doing business.”

Those early conversations helped Rogers see that it might be challenging to recruit enough Canadian farmers to scale the model. The reason: Canadian farmers, she says, were unwilling to make the leap to what were clearly disruptive ideas.

“Two things really struck me. First, and I don’t mean to sound condescending, but a lot of farmers didn’t really understand finance; they didn’t understand the concept of getting a contract that was bankable or a buying partner that could finance them or the power of those things,” she explains. “In Canada, which we learned when we left Canada and focused on (farmers in the United States), trade finance is largely done by some pretty archaic institutions and our model was really difficult for them to comprehend.”

Making inroads was so challenging that Rogers made the decision to pivot. By 2015, she shifted her focus away from Canada and pursued relationships with farmers in the United States and emerging markets where she found a greater willingness to embrace what Agriprocity was offering.

As part of the evolution, Rogers also focused on finding farmers growing crops such as algae and fava beans that were in demand as ingredients.

Disrupting the market

Now, the timing was right. An increased interest in health issues ranging from diabetes to digestive disorders has led to more wellness products made with ingredients believed to prevent disease and promote good health. As a result, the demand for these so-called “functional ingredients” has exploded. The global market is expected to reach US$94 billion in 2023, up from US$64 billion in 2017.

Agriprocity has worked with algae farmers in Latvia, Lithuania and Italy, finding partners interested in purchasing their crops, narrowing down the most in-demand algae strains and growing them under the conditions buyers wanted.

These efforts to “un-commoditize” a portion of a farmer’s crop output helps farmers develop more transparent, longer-term revenues, she says. They can also build targeted crop value chains that offer them sufficient security so they can better plan for the future and reinvest a portion of their profits into their farm.

While serving as a private sector delegate in the United Nation’s Committee on Food Security, Rogers saw opportunities to help farmers transform fruit and vegetable crops with high levels of waste into ingredients for food-based natural supplements. photo: Supplied

One of her clients, Prairie Fava, grows fava beans in Glenboro, Man., and processes them into flour, flakes and dehulled beans; the agribusiness serves as the link between farmers and food manufacturing companies across the globe.

In 2017, Hailey Jeffries had been researching the market potential of fava beans. She was interested in growing the crop and processing it into flour, flakes and dehulled beans from seeds that her husband, Cale, a fifth-generation farmer, provided through his seed business.

Jefferies believes that working with Agriprocity not only validated that her business model was on trend, it helped her make smarter decisions about positioning Prairie Fava for success.

“My husband said, ‘My farmers want to grow fava beans if they had a consistent market to sell them to,’” Jefferies recalls. “Nicole understands the whole vertical integration and supply chain and how important that is… and she’s been a great resource and has amazing knowledge to share about what’s going on in the industry globally.”

Rogers is passionate about being the link between farmers and food manufacturing, and calls the approach “strategic marketing meets money.”

Farms like Prairie Fava, she explains, become “super bankable” because they have a product that is produced according to the specifications that buyers want. It allows them to raise money to take their operation to the next level with a fractioning plant or other infrastructure that wouldn’t be possible without the commercial demand.

“They started out with wanting to find a way to get fava beans in a rotation and now they’re doing awesome ingredient products; we love stuff like that,” Rogers says. “The model is still positioning farmers for investment without selling the land.”

Agriprocity helps farmers connect the commercial demand with primary production opportunities or processing opportunities (or both).

Rogers believes there’s a growing consumer demand for sustainable products in the wellness space. Even the smallest companies understand that consumers are interested in knowing more about the sources of their foods and prioritize purchasing products with clean supply chains and good stories.

“From a farmer’s perspective, they don’t always understand how to translate that demand into production,” she adds.

Rogers cites Froot Loops as an example. In the United Kingdom, Kellogg’s had to remove the original red, yellow and blue loops because their food regulations stipulated the cereal could not contain synthetic dyes and no natural color substitutes could be found. Globally, there were no good replacement options — and those are the problems Rogers wants to tackle through Agriprocity.

Helping farmers come up with crops that could act as affordable, natural color substitutes and connecting them with global brands like Kellogg’s could prove “froot-full” for both partners.

“There are these huge categories of opportunities but people don’t know how to (capitalize on them),” she explains. “That’s what we do; we’re tackling those really hard problems that no one really knows yet exist.”

A global reach

In 2018, Rogers expanded Agriprocity to Kenya. While serving as a private sector delegate in the United Nation’s Committee on Food Security, she saw opportunities to help farmers transform fruit and vegetable crops with high levels of waste into ingredients for food-based natural supplements.

Partner farmers grow perishable leafy green vegetables such as kale and spinach which have high rates of post-harvest losses that generate no income for farmers. Agriprocity purchases the crops that would otherwise go to waste and processes them into supplement powders.

The pilot project helps farmers develop steady revenue streams for crops that once had little value. The supplements, which contain high levels of vitamin A, vitamin K and iron, micronutrients that are often deficient in areas with high levels of malnutrition, are being incorporated into government-sponsored school nutrition programs.

“The hypothesis in a lot of emerging markets is that the cold chain’s probably never going to come because it’s so expensive,” she says. “We’re trying to find smarter ways to process existing capacity to bring revenue to the farm gate.

“I don’t want to tell a farmer to grow something different,” she adds. “I just wanted to study and realize what they were growing, and then find the right buyer who could harness the things they were already producing.”

Rogers knows this kind of disruptive thinking could take a while to catch on. She continues cultivating relationships across the globe with farmers and manufacturers who embrace creative thinking and strategic risk-taking.

Looking forward, Rogers hopes to continue building Agriprocity’s investment arm with the hopes of transforming the supply chain and adding value to agricultural products. While emerging markets will likely remain her major focus, Rogers also hopes to bring Canadian farmers back into the fray.

“I think Canadian farmers, hopefully, are pushing the envelope and starting to look at their crops as ingredients more and more,” she says. “I hope farmers will start to understand that it’s not such a bad idea to go back to growing even six crops — or even 20 crops — versus two crops.”

In the East Kootenay region of British Columbia, David Mutch is considering how crops such as cherries, carrots and potatoes growing on yaqan nukiy Farms, the 5,000-acre farm operated by the Lower Kootenay Band, can be turned into high-value ingredients.

“From our perspective as a First Nations farm, there is a lot of land that we’re not using or land that we are using but could get more value out of,” explains Mutch, the agriculture business co-ordinator for the Lower Kootenay Band.

Mutch read an article about Agriprocity and contacted Rogers in 2018. Although the First Nations community hasn’t signed a formal agreement yet, Mutch believes they could benefit from a partnership.

“Nicole is very in touch with the trends and she is well connected with global contacts,” he says. “We have the land and staff; we need their guidance, professional marketing expertise and contacts to guide us.”

“We’re already seeing that the big model of aggregation and pushing a whole bunch of crop that’s uniformly grown and has a very specific specification works for big food chains is not so good for farmers,” Rogers says. “I’m excited for the de-centralization and shorter supply chains that are coming and all the innovation that’s going to come with that. It’s going to be awesome for farmers, and we want to be part of that.”

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