And that’s the type of content Country Guide / Farm & Family aims to bring you each week.

For example, in Jeanine Moyer’s article The changing landscape of Canadian food demand, consumers’ eating habits are shifting, which is creating both risks and new opportunities for farmers and processors.

Jeanine also wrote this inspiring profile story about Janis Harris and her Ontario flower farm. After more than a decade of slowly building a flower-growing side business, Harris left her job as an optician to run the farm full time. Weeks later, the COVID-19 pandemic shut the world down. Read the article to find out how she managed to meet this incredible challenge.

Herman VanGenderen’s Investing for Fun & Profit column explains how the incredibly quick rotation from technology to HALOs (which stands for High Assets, Low Obsolescence) demonstrates the importance of diversifying your investment portfolio. He writes, “As money comes out of tech, it’s going into long-forgotten sectors defined by those that are capital intensive, high assets that artificial intelligence cannot make obsolete. Energy, pipelines, utilities, mining and industrials fit that definition.”

And contributor Richard Kamchen tells us how even though farmers are up against an era of unparalleled volatility, they aren’t entirely powerless to mitigate some of the risks. Learn about the economic and political influences guiding decisions on the farm here.

Farm families work together to break new ground and nurture growth. As each member grows, our Farm & Family team wants to know how we can help YOUR farm and family grow further. Share your thoughts with Farm & Family editor astewart@farmmedia.com

The post Farm & Family – April 10 edition appeared first on Country Guide.

Agriculture is a significant player in the economy, but it doesn’t get an equal share of large government or large pension or private growth fund investment.

WHY IT MATTERS: The agriculture and food sectors can help Canada accomplish some of its goal of attracting $1 trillion in investment over five years, but the recent track record of growth funding has been poor.

Growth capital is needed by companies at the stage when they are operational and need to scale to be successful. That’s often when the most funding is needed and is beyond the ability of venture capital funds and smaller funders to provide.

“In the Canadian context, a lot of where that money is coming from would be in the early stage,” says Lisa Ashton, agriculture and nature policy lead with RBC Thought Leadership.

A growing number of incubators and accelerators, such as Emmertech in agriculture and District Ventures in food packaging, are now in place to help earlier in the agriculture technology business development process.

But once funding needs grow past $15 million, to help fund manufacturing or processing or global distribution, most of those groups are out.

Government growth funds don’t distribute money in the agriculture world in proportion to agriculture and food’s standing in the economy, and that’s limiting the sector’s potential as a strategic asset for the country.

Agriculture has received about two per cent of government-backed growth funding and four per cent of total growth funding in the past five years.

The RBC report says that for growth capital in agri-food to align with its contribution to GDP, funding needs to grow by 36 per cent to $13 billion from now to 2030, compared to the past five years.

“There is a mismatch between the framing of Canada’s agri-food sector as a superpower and its strategic advantages with the actual scale and focus of investments domestically,” the report says.

That growth needs ideas and people, but it also needs money, and the money isn’t flowing into agriculture right now.

Traditional funding won’t do it, the sector will need growth money from more generalist funds, says Ashton.

“Navigating that can be quite hard for generalists that don’t have a lot of exposure to agri-food,” she says. “It goes back to the talent challenge we see in agri-food and having more Canadians or people working in Canada who have an understanding of the sector.”

Funding in other countries

Other middle-power countries have better funding of agri-food from growth funds. Ashton says that once companies reach the need for $15 million in funding, the funder options drop off, and that’s a challenge in most countries. However, the drop off is much deeper in Canada than in Japan, the U.K., Netherlands and Germany.

“I wouldn’t say any country has a perfect example,” she says, but most of them outperform Canada in growth funding for agriculture and food.

What could be improved?

The RBC report listed five areas for improvement to help unlock more growth funding.

1. Improve intellectual property and academic incentives to increase commercialization of research, especially from universities.
2. Create an AI-driven concierge, housed within a national organization, that provides one-stop information to help manage the support drop off that happens when a startup company outgrows incubators or accelerators.
3. Have agri-food experts translate industry knowledge for generalist investors.
4. Align government growth, investment and infrastructure funds to better fit with national strategic priorities, especially agri-food.
5. Help mitigate revenue uncertainty for companies creating value-added products in agriculture and food.

The goal is to grow global leaders in agriculture and food, to create ‘unicorn’ level companies with at least $1 billion in revenue. Ashton says these are rare in agriculture, but Canada has none, whereas most other major agriculture producing countries have produced some.

The post Growth capital hard to find for Canadian agri-food appeared first on Country Guide.

In the past, capital typically came from banks or family.

But the changing demographic of farmers and farmland owners means that many farms and a tremendous amount of farmland will change hands over the coming decade.

To add to the list of challenges, inflation and farmland appreciation has made farming increasingly unrealistic for someone not already in the industry. In recent years farm profitability and asset appreciation has tempted more kids to return to the farm. In many cases, though, the farm isn’t big enough to support multiple families.

And whether it’s the Lake Diefenbaker irrigation project in Saskatchewan or Great Clay Belt tiling and clearing in Ontario, additional capital will be required since many farms won’t be able to absorb the extra investment.

Consolidation will also continue.

So, we have to ask: is there a way to attract capital that encourages more farms, not less?

Joelle Faulkner just might have the answer.

As CEO of Area One Farms, Faulkner has developed a unique farmland investment model, one that allows farmers to maintain or grow ownership of the land. Faulkner has spent the last 12 years pitching her model to investors.

“I think farmers should own their land,” says Faulkner. “The way that Area One has most successfully done that, supporting farmers in growing their acreage, is through equity partnerships.”

In addition to providing equity capital to farms, Area One provides 10 to 15 per cent of the annual appreciation, or “upside,” of farmland as a bonus to farm partners. The upside isn’t directly correlated to the investment made by the farmer, it’s a top-up provided by Area One.

Area One targets a 10- to 25-year time horizon for their investments.

Faulkner likes provincial ownership restrictions because they support her belief that farmers should own the land whenever possible. She suggests, however, that in provinces where farmland ownership is restricted, e.g., Saskatchewan, farmers may want to start considering not only the amount, but the type of farm investment capital needed, and adjudicating applications on that basis.

“Maybe the question should be, ‘What is the character of the capital we need?’ Maybe you want capital that gives equity to farmers or that helps farmers out of special debt arrangements. Maybe equity for farmers that want to irrigate multiple quarters at once and scale a farm faster.”

Faulkner asserts the best partner is still no partner. If a farm can fund growth internally or with debt financing, she says they should. In those cases, farm equity appreciation remains with the farm.

“We have found good partners who have bought farmland at a reasonable price and done cleanup work, all the things farmers normally do. Area One’s strategy was always to partner with people to help them achieve family farm commercial scale. This means we can give away upside. We work with a lot of people with normal size goals which means we can help more farm families.”

Faulkner believes this model addresses it all. “It’s a good story, it’s intergenerational transfer, it’s keeping farmland where it should be, owned by farmers.”

The post Attracting the right kind of capital in agriculture appeared first on Country Guide.

They’re questions that seem like they should have some obvious if not easy answers. Instead, they’re what you might call agriculture’s iceberg issues. The bit you can see is only a hint at what lies under the surface.

So, if you need more acres, someone might say, just rent them, or have a meeting with the bank and throw a few more shovels full of debt onto the pile.

Under the surface, though, are all those questions. Where can you find more land, how can you service more debt, how much longer can you wait?

It can make you wish you didn’t know the challenges so well, because right now it feels like you’re in danger of getting lost in the weeds before you even take your first step.

As agriculture continues to grow in popularity — and let’s face it, it hasn’t been this popular in more than 50 years — it’s clear that many who have no ag background and haven’t ever set foot into a field are increasingly interested in the industry as a business investment. And there may, possibly, be good news in this for farmers, especially those who are leveraged to the hilt yet know that unless a few critical pieces line up for them, they are actually going nowhere. And that potential good news starts with unique models that have sprung up in different areas of the world where investors are funding partnerships on the farm.

If that seems unlikely to you, you aren’t alone, but dig a little deeper and your scepticism may waver. Some of these groups seem to have a good fit, at least on some farms. After all, farmers play a long game; maybe investors do too. And both have an eye out for investment value. With a finite landbase globally, land values continue to ratchet up. Farm Credit Canada reports that since 2012, Canada’s farmland has gone up at least 5.2 per cent annually. In 2022, the national farmland value jumped 12.8 per cent. Ontario led the way with an eye popping 19.4 per cent while B.C. was “last” with an impressive 8 per cent.

With generally favourable long-term market projections that reduce risks while the land investment grows, it seems a smart choice for both.

But is it? Country Guide took a look at one Canadian company bridging the gap between the farm and the city to see if they are really working together like never before.

Area One Farms

Canada

A Canadian-owned business that operates throughout the country, Area One Farms was created by Joelle Faulkner, an Ontario farm girl raised on the family dairy farm near London but who now, because of her success in agriculture, spends her days in downtown Toronto, steps from its famously upscale Leaside neighbourhood

To her, there’s no real disconnect. It’s her farm background, she says, that gives her the knowledge base to work both with investors eager to diversify their portfolios and also with farmers looking for new ways to continue or to grow their farm businesses and their farm way of life.

“Based on our family’s experience, farmland was a good investment, but I actually didn’t like the idea that investors — who were just starting into farmland at the time — would buy land and rent it out,” Faulkner says.

“If the farmer doesn’t participate in any of the appreciation, they’ll never be able to buy the land. What I was looking for was whether you could make a partnership where the farmer always got a disproportionate amount of the appreciation so that eventually they could buy out the investor. And the investor would still do well enough that it would be worth doing.”

It turns out she thinks she can and it’s successfully happening across Canada. With 41 farmers and 180,000 acres of land under the AOF program, business is going well. Most farmer clients are mid-career, between 35 and 55, and while they have farms of various sizes, they have growth on their minds.

Depending on what a farmer is after, AOF offers two models to choose from.

More details are available via its website, but essentially for a crop share, a farmer simply pays a minority amount of money to buy additional land with AOF fronting the majority capital. Faulkner says this is mainly aimed at farms that want to capture smaller growth opportunities or when the land is less than 50 per cent of the farm’s existing base.

The participating farmer pays the operating expenses but gets paid crop revenue minus crop-share rent. The investors, meanwhile, are on the hook for land taxes and a pre-determined amount of crop insurance.

The second offer, AOF’s full farm partnership concept, allows for arguably larger scale growth opportunities and is often used in scenarios where a farming child and spouse are returning to the farm and the farm needs to expand to meet the additional living expenses.

In this case, the farmer contributes the farm, machinery and infrastructure while AOF contributes cash into a partnership. Using that cash, the partnership then buys the land the farmer wants to acquire or rent. (If required, AOF will help fund additional machinery and infrastructure.)

Faulkner notes this model has also proven popular among farmers looking to get out of special loans without losing the farm. Once the new land is worked, the farmer receives 15 per cent net income on it with the remaining 85 per cent going to the partnership, which means the farmer earns a share of the partnership’s net income.

For example, if the farmer owns 20 per cent of the partnership, they will earn an additional 17 per cent of the income, so 32 per cent in total. The farmer also earns anywhere from 10 to 15 per cent of the farm’s appreciated value on top of the land appreciation on their share of the partnership.

Expenses are paid as a joint venture with predetermined terms and conditions.

With a farm partnership, farmers are guaranteed this arrangement for 10 years. Then, at expiration, the farmer has the option to extend the partnership or buy out AOF, although if the farmer wants to buy out AOF early, that is also an option.

Overall, about half of AOF farmers opt for crop share and half for farm partnership, although 70 per cent of the investment money lies in the farm partnerships

Faulkner says the goal is for the farmer to ultimately have the long-term control and ownership. “We always partner with the farmer so they’re always a co-owner,” she says. “So whether you’re a crop share or you’re a full farm partnership, you are always a co-owner on the specific land we’re buying. You always have the right to buy us out.”

A feature that many enjoy is that once the terms are set at year one, they do not change. Boom times around the corner? Rent won’t go up $20/ac. A deal is a deal.

“You also earn as the operating partner (in a full farm partnership),” Faulkner says. “The tricky part about (conventional) renting is that normally when you rent you don’t get to own… you either have to buy it all or you have to rent it all. And then if you had the money to put in another five per cent one year you can’t do that either. Our whole goal is over time you buy this from us.

“This is an investment for us, but it is your life.”

The eager investors aren’t just wealthier landowners, either. In fact, most aren’t from ag at all and it often takes a meeting with Faulkner for them to realize the potential opportunity in front of them.

AOF works with foundations, endowments, wealth managers and individuals. Once they invest, it’s up to AOF as to where it will deploy the money. Investors and farmers never interact and funds are only invested in Canada, never abroad.

Faulkner says there’s many cases where a farmer can’t grow because they are at maximum scale. However, if a landlord decides to sell and the farmer can’t buy it, there’s an immediate problem on the horizon.

“You kind of need to figure out how to, because otherwise you’re going to lose the rented land and you’ll never get it back or another chance to buy,” she says.

On the Cole’s farm

Now in its 12th year of operation, Area One Farms has had three initial farmers buy out of their agreements. Faulkner says she couldn’t be happier.

“It’s been totally as good or better than we expected,” she says. “If what you need is equity for growth or a way to grow where you also own part of it, as opposed to building it on rented land, we are your very best option and we will be a great partner.”

That’s the assessment of Kurt and Lynn Cole at Coronation, Alta., where they farm and have been working with AOF since 2015. (Full disclosure: AOF provided the Coles’ names to Country Guide, although our interview with them was conducted independently.)

In 2014, the Coles were farming 2,100 acres of land and 150 cows, but a cousin who was also their neighbour had approached the family about selling off his farm. He told Cole he wanted them to own it, giving the family one year to figure out financing.

Cole poured over all the options and ways to make it happen before settling on AOF.

Simultaneously, two of his daughters and their husbands expressed an interest in returning to the farm, so there were even more complications to address.

After looking at all options, AOF made the most sense, Cole says.

“For me it was a great way to have alternative financing and maintain the lifestyle and the direction that we wanted to go,” says Cole, now 61. “When you have a chance to grow your farm, one of the biggest obstacles that we have is, of course, capital. When that is taken away, your whole ability to plan and to grow becomes a lot easier.”

Cole describes himself as “a partner guy” so the idea of joining forces with an outside entity did not bother him, though he appreciates that the concept isn’t for everybody. While there have been a few “growing pains,” overall he is satisfied with the arrangement.

Both sides understand that not every year is a bumper and the high-highs are the exception, Cole says, which he says is another reason the partnership has been a good fit for the farm.

“We were able to grow to a position that was comfortable for not just the income but also the workload of everybody that wanted to come back to the farm,” he says.

Faulkner also understood the challenges that the Coles faced. Her farm background gives her a level of innate knowledge that not every financial planner might have.

Looking into the rearview mirror, Cole believes the farm would have continued to grow, even without AOF’s help, but admits it would have taken considerably longer and not at the scale they are today, with 4,000 acres of cropland and 800 cows.

“I probably wouldn’t have had the goals that I have now,” he says, adding that adding his two daughters’ families likely wouldn’t have worked out the same, either.

Would it work for other farms? Cole’s advice is to sit down and really think it through.

“Everybody has to make that decision on their own,” he says. “You have to be good at working with a partner, and not everybody gets that, but when you do get it, you get the advantage that the partner brings to your business.

“It’s not a magic wand. It’s alternative financing that gives you opportunity. Then what you do with that opportunity is where you’ll end up. It’s still about the decisions that we each make. It’s an understanding of how do we use the opportunity that’s presented to us.”

Overseas

Investors in other countries have also come to realize that agriculture could be a winning ticket for stable, predictable growth with satisfying returns. Among others, here are two examples of companies that work with farmers and investors to create profitability on both sides of the fence.

LANDE, Latvia

Based in Latvia, LANDE lets farmers invite non-farmers to become shareholders in their farm. Similar to GoFundMe or GiveSendGo, LANDE allows small and medium sized farmers to make a funding request and any individual can decide to fund some or all of the farmer’s ask. Maybe the farmer needs money to rent more land or buy a new tractor. They set the amount needed and people invest. At the end of the term, (i.e. 12 to 60 months) the farmer is expected to pay back the loans to the micro-investors, who earn their principal and interest back at the conclusion of the project.

LANDE says it only publishes carefully selected projects with a low loan-to-value ratio. Depending on the nature and timeline of a project, collateral can be in the form of a three-way agreement between LANDE, a grain buyer and a farmer, a commercial pledge or a mortgage loan.

To date, LANDE has more than 6,500 investors. The average term of a project is 18 months and carries a 10.9 per cent interest rate. In 2023, the company expanded into Romania and company CEO Ņikita Gončars says the goal is to be operational across the entire EU.

Visit lande.finance to learn more.

Growth Farms, Australia

Aimed at private and institutional investors, Growth Farms’ business model is to purchase and manage Australian farmland. The company touts 10-plus per cent returns each year to those looking to add a surefire winner to an investment portfolio.

Publicly, the company says farmland carries a lower risk versus the traditional asset classes. Those interested in Growth Farms can be from anywhere and the company says a majority of its investors are from overseas.

People can either join as an active or passive client. Active means buy and operate while passive means buy and lease. Those who wish to buy and operate are much more involved and may have higher returns due to infrastructure development, but it also carries a greater risk of volatility because of the direct involvement. Passive investors still receive returns, which come with less risk, while assets are leased to third parties with the portfolio and tenants being managed by Growth Farms.

The assets the company typically acquires are in areas of high rainfall and company CEO Martin Newnham says their due diligence is strictly evidence based. “Which means our decisions are not based on an ‘I reckon or ‘I hope’ or ‘I might’, but on proven data,” he says.

Visit growthfarms.com.au to learn more.

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The Kimberly Cattle Portfolio “is an established and well-managed asset that provides important diversification in our client portfolios,” said Ben Hawkins, executive managing director at the Alberta Investment Management Corporation (AIMCo), in a Nov. 28 news release.

AIMCo invests globally on behalf of pension, endowment, insurance, and government funds in Alberta.

AIMCo partnered with Australian agriculture investment management firm New Agriculture on the deal. It followed a public tender process and is subject to regulatory approvals, the release said.

The portfolio consists of Yougawalla Pastoral Co and Argyle Cattle Co. It’s a large-scale cattle breeding business spanning nearly 3 million hectares (7.4 million acres) or largely leased land in the Kimberly region of Western Australia, AIMCo said in the news release.

AIMCo previously acquired Australian mixed farming business Lawson Grains in January of 2022. The corporate grain operation farms over 90,000 hectares (a bit more than 222,000 acres), according to the company’s website.

Haydn and Jane Sale are staying on as managers of the portfolio, the release said.

Haydn Sale told Australian media that AIMCo is planning to expand on natural assets, like approval for nearly 500 hectares (1236 acres) of irrigation, and frontage on a few major water sources.

“Ensuring we can grow fodder to further value-add cattle has been a big key focus for us and the new buyers coming in really saw that as a big upside for the business,” he told the Australian Broadcasting Corporation (ABC).

“They’re very much behind getting that development done,” Sale added.

AIMCo bought the portfolio from Hong Kong property developer Hui Wing Mau, according to the Nov. 29 ABC report.

—Geralyn Wichers is associate digital editor of AGCanada.com. She writes from southeastern Manitoba.

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Winnipeg-based Buhler Industries on Aug. 14 reported net income of $16.1 million on $67.6 million in revenue for its second quarter ending June 30, up from $1.1 million on $57.8 million in the year-earlier Q2.

Buhler said it “achieved higher sales as it begins to see improvements in the supply chain issues experienced over the last two years.”

The company said it also expects increased sales during the rest of 2023, on a “large backlog of sales (and) strong demand for agricultural machinery and equipment.”

Buhler in its second quarter also booked its revenue from the sale of its tillage equipment manufacturing plant at Vegreville, Alta., which it shuttered in 2021. The company closed on the sale of the former Ezee-On plant in April.

The Q2 ledger also includes proceeds from the sale of Buhler’s property at Woodstock, Ont. — on which it has exercised an option to lease back for up to five years.

Buhler said in April that the combined net proceeds from those plus the sale of its property at Fargo, N.D., which it booked separately in its first quarter, came in at $24.3 million. In its Q2 report, it logged the combined Vegreville and Woodstock sales as a gain on disposal of assets valued at $12.4 million.

The company said in July that the sale of those “underutilized assets” has helped it to secure “sufficient capital for current operational needs” — but it also announced at the time it has hired a Toronto firm, Origin Merchant Partners, to identify a new “long-term investment partner” for Buhler.

Buhler said in July it “seeks to bolster its position in the agricultural industry and continue its commitment to serving farmers and dealers with high quality farm equipment.”

The company didn’t say what its future plans would be if a new investment partner is brought on board. It said its “search for the right investment partner is driven by a commitment to preserving the legacy of the iconic Versatile and Farm King brands.”

Buhler also said it wants a partner “who understands and respects the historical significance of these brands, as well as their immense potential for future growth and innovation.”

Shares in Buhler today are about 97 per cent owned by Russian farm equipment firm Rostselmash, while the remaining three per cent are publicly traded and held by employees and other investors. A Buhler representative wasn’t available for comment this week. — Glacier FarmMedia Network

The post Buhler books bigger profit as supply chain issues pass appeared first on Country Guide.

Agriculture Minister Marie-Claude Bibeau confirmed Wednesday that the interest-free limit under the Advance Payments Program (APP) for the 2023 program year is now $350,000, effective Monday (May 8).

The regulatory amendments allowing this increase are not retroactive, the government noted. The new limit will be applied to existing APP advances as of Monday, when the amendments came into force, and producers still must pay any interest that accrued on an existing advance before that date.

Bibeau said Wednesday the decision comes as farmers “continue to face significant financial challenges including high input costs and rising interest rates.”

The APP gives eligible farmers access to up to $1 million, calculated based on up to 50 per cent of the “anticipated market value” of production, whether it’s in storage or still to be produced — with “preferential” interest rates on the portion above the interest-free limit.

The operating credit from a cash advance thus can help improve a farm’s cash flow or offer the flexibility to sell commodities into more favourable market conditions, the government said.

Following the budget announcement in March, at least one farm consultant suggested other farmers might consider investing interest-free APP cash to benefit from the current interest rate environment.

APP advances, on most eligible commodities, must be repaid in full over the following 18 months. On cattle and bison production, that repayment period is 24 months.

The single-year interest-free limit increase to $350,000 is on top of last June’s temporary increase to $250,000 for the 2022 and 2023 program years — up from the usual limit of $100,000.

That earlier increase is estimated to save farmers an average of $8,600 over the two years, the government said Wednesday. This week’s increase, meanwhile, is expected to translate to total savings of up to $12.4 million, or an additional $3,600 in interest costs per applicant on average.

The government estimated the total federal investment for these increases for 2022 and 2023 could run up to about $94.9 million.

APP cash advances are delivered in Canada through 30 industry-led associations. One such program administrator, the Canadian Canola Growers Association, said last month it was waiting for the updated interest-free limit to be made available and “will notify customers as soon as we are able to issue advances under these new parameters.”

The CCGA also noted last month that some of the APP advance rates for 2023 have risen or fallen while others remain flat. For example, it said, the 2023 advance rate per tonne for wheat is up 20 per cent, and for canola up nine per cent, over 2022.

The feds, in Wednesday’s release, said they also plan to consult further with the provinces and territories “to explore ways to extend help to smaller agricultural producers who demonstrate urgent financial need.” — Glacier FarmMedia Network

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The province on Tuesday announced plans for what it calls the Alberta Agri-Processing Investment Tax Credit — a 12 per cent, “non-refundable” tax credit for corporations making capital investments in “value-added agri-processing” in Alberta.

The tax credit would be applied against eligible capital expenditures for corporations investing $10 million or more to build, or expand, agri-processing facilities in the province.

Capital investments made as of Tuesday or later may be considered in the calculation of a company’s total tax credit, the province said, adding it will be ready to start accepting applications this spring.

Eligible qualifying applicants may include corporations that have received funding from other provincial sources, the province said.

“We have heard from Alberta’s producers and processors that we need to do more to help grow our province’s agri-processing industry,” provincial Ag Minister Nate Horner said during an announcement at Harmony Beef at Balzac, just north of Calgary.

The province, he said, “has the fundamentals to take our value-added agriculture industry to new heights and meet the increasing global demand for food.”

With the tax credit, “Alberta has positioned itself to attract more large-scale sector investments than ever before from companies like mine,” Harmony CEO Rich Vesta said in the province’s release. “This is the right way for Alberta’s agri-food sector to support diversification, create jobs, compete and win.” — Glacier FarmMedia Network

The post Alberta plans new ag processing tax credit appeared first on Country Guide.

U.K.-based Bluebell is also seeking an overhaul of Bayer’s corporate governance, the report added.

A Bayer spokesperson, who declined to comment on the report, said: “Generally speaking we are always open for a constructive dialogue with our stakeholders.”

Bluebell, which has previously taken stakes in companies such as Danone and Glencore, didn’t immediately respond to a request seeking comment.

The report follows news on Monday that the activist investment fund Inclusive Capital Partners, run by hedge fund veteran Jeffrey Ubben, had acquired a 0.83 per cent stake in Bayer, which continues to suffer from a weak market value.

Bloomberg said the size of the Bluebell holding was undisclosed.

— Reporting by Shivani Tanna in Bangalore; additional reporting by Tom Sims in Frankfurt.

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The West African country has a history of sometimes deadly conflict between local communities and foreign companies that have cleared huge tracts of land for palm oil and sugarcane plantations in recent years.

Locals have complained of environmental damage, losing their livelihoods and not being fairly compensated for their land. Under the current system, landowners get an annual rent of $2.50 per acre, which was determined by the state.

The Customary Land Rights Act and the Land Commission Act, both enacted on Monday, empower local landowners to negotiate the value of their land with investors and prevent it being leased out without their express consent.

Campaigners and locals praised the move, while one palm oil company executive said it would spell the end of investment.

“To our knowledge there is not a legal regime anywhere, in either hemisphere that grants such robust rights to communities facing harm,” said Eleanor Thompson of Namati, an international legal advocacy group.

A director of SOCFIN, the biggest agribusiness company in Sierra Leone, called it a “dream of NGOs.”

“Certainly it will block any investment… It makes things very expensive and we are all prone to enormous blackmail by various communities,” Gerben Haringsma added.

The Luxembourg-based company has invested more than $150 million in palm oil farming in Sierra Leone. It has also frequently clashed with local landowners.

Lands Minister Turad Senessie said the new laws would encourage investment by ensuring peace and order.

“This is a win-win situation for both business and Sierra Leoneans including rural landowners,” he told Reuters.

One of the laws will also end a colonial-era provision that bars descendants of freed slaves from owning land outside the capital, Freetown.

— Reporting for Reuters by Umaru Fofana.

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