Millions in federal funding has trickled into the private sector as Farm Credit Canada (FCC) announced $150 million toward a new agri-food-focused venture capital fund spearheaded by Canadian entrepreneur and investor Arlene Dickinson.
Dickinson’s $500-million Velocity Agri-Capital Partners Fund will back Canadian agriculture and food companies looking to expand into Southeast Asia. The fund is Dickinson’s answer to questions of how to shore up Canadian sovereignty, a task she told The Logic earlier this week required expansion of food manufacturing and processing in this country.
Arlene Dickinson
“The world needs what we grow and produce, and it’s time for us to build on our strength in commodities and into higher-value-added products.”
“We have focused on shipping grains and cereals and ingredients to other nations, who then take those ingredients and products, commoditize them, and ship them back to us,” Dickinson said.
Designed as a growth-equity fund, the Velocity fund plans to back middle-market companies, with a focus on later-stage financing gaps. The fund is specifically targeting Southeast Asia due to the region’s preexisting trade agreements with Canada, as well as its size and food security needs. The fund could potentially invest in Southeast Asian companies looking to set up shop in Canada, as well.
FCC has come on as the lead investor in the Velocity fund, as part of its commitment to deliver $2 billion in funding by 2030 to advance Canadian innovation in agriculture. Dickinson said the fund will look to additional domestic and international investors as a way to fill out the remaining $350 million.
In a statement issued alongside FCC president Justine Hendricks yesterday, Dickinson said that building more value into Canada’s commodity-heavy agriculture sector would strengthen Canada’s trading relationships and position the country as a global agricultural supplier across the value chain.
“Canada’s agri-food sector is strategically important to our global brand and our trading relationships. The world needs what we grow and produce, and it’s time for us to build on our strength in commodities and into higher-value-added products,” she said.
During her tenure as president of FCC, Hendricks publicly stated that productivity rates have been declining in the Canadian agriculture sector, and that improving them could unlock as much as $30 billion in net farm incomes in Canada. Likewise, expanding the food and beverage manufacturing sector could grow Canada’s economy by as much as $40 billion in GDP, according to FCC reporting.
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“The world is hungry for Canada right now,” Hendricks said in BetaKit Most Ambitious earlier this year. “So it’s very much our opportunity to step up.”
The FCC’s investment in the Velocity funds itself comes on the heels of a $1-billion investment into the crown corporation by the federal government. On Sept. 14, Canada’s minister of agriculture, Heath MacDonald, announced $1 billion to set up an FCC-led Agri-food Project Finance Fund to support the financing of agri-food infrastructure and processing capacity projects. That spending is part of the federal government’s broader $3.2 billion Nation Food Security Strategy and comes at a moment when Canada is actively courting private sector investment and funnelling billions of public sector dollars into supporting Canadian industries it sees as vital to sovereignty and nation-building.
It also comes amid a flurry of announcements stemming from Prime Minister Mark Carney’s Global Investment Summit, which is being held in Toronto this week.
Feature image courtesy Wikimedia Commons. Shard under Creative Commons Attribution-Share Alike 4.0.
