Some of the groups think Canada, with its vast tracts of fertile Prairie farmland, will be the foreign investors' next target. They believe the investors will find a way around the foreign or non-resident ownership restrictions in Manitoba, Saskatchewan and Alberta that prevent them from buying. Or they expect the restrictions to melt away as farmland values rise, giving Canadian owners an incentive to sell to the highest bidder in a global land market.
Stephen Johnston, a partner in the Calgary private equity fund Agcapita, which buys Canadian farmland for Canadian investors, said massive amounts of Prairie farmland would get snapped up overnight if it weren't for the ownership restrictions. “We're contacted weekly by foreign investors,” he said.
Mr. Johnston, of Agcapita, thinks the rush to buy farmland in poor countries to lock up the food supplies and export them back to the investing country is ultimately doomed. If a new food crisis emerges, local populations will not tolerate food exports. “I think the Saudis and the Chinese will shrink away from foreign farmland purchases when they realize the political risk,” he said. “If food goes short, governments will nationalize the farms.”
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