Bay Street and backroads
Joelle Faulkner is developing a new economy of agriculture
By Debora Van Brenk, BA'86, MA'87
Joelle Faulkner appreciates farmers – she also helps farmers appreciate their land.
Faulkner, BESc/HBA’05, is President and CEO of Area One Farms, an innovative private equity firm that has developed a new model for investing in Canadian farms. At the same time as Area One helps family farmers expand on and improve their acreage, it helps investors find partnerships that are secure, motivated
Faulkner, who grew up in the city in a family with a long history of farm management, started the business five years ago, following a stellar postsecondary academic career that began at Western.
A Londoner, Faulkner finished a combined, five-year degree in Chemical Engineering and Business in four years – an accelerated pace that reflects both her drive and her focus.
“By the time you go to university, you either have work ethic or you don’t. That’s established before your 20s, and then you have a set of various opportunities to develop that,” she said.
Finishing her degree early, she applied for and received a prestigious Rhodes Scholarship at Oxford University. Faulkner studied law at Oxford for two years. Then, as a Fulbright Scholar, she earned a master’s in law at Stanford University in California and stayed there to work in medical device design before returning to Ontario.
After a brief stint as a design consultant, she became an advisor to the late Joseph Rotman, BA’57, LLD’09, chairman of investment firm Roy-L Capital Corporation and one of the country’s leading investors and philanthropists.
In 2013, Faulkner began Area One, a company predicated on the idea farmers and investors can each benefit from having equity in the land.
She designed it for the “culture of Canadian farmers” – their independent streak, constant innovation and need to improve productivity without incurring oppressive debt.
Generally, farmers looking to expand their operations either rent more acreage or work with a lender to buy it. But renters often have little incentive to improve the land’s long-term productivity and overall value – by clearing brush or adding tile drainage, for example.
“So (if you’re a farmer), you would like to buy the land because you know there is value in it but you don’t want the debt. If you owned it, you would do those other things that would let you add value to it but there is no model that would let you do that and be rewarded for it,” she said.
Area One changes that game by matching farmers and investors who would together benefit from the equity created by buying the land.
“If I want to be in partnership with the best farmers, then I want to give them what they value, and I believe they value appreciation. If I want to do that, then what does the investor need to participate in to make this work?”
It is, she says, a new economy of agriculture, taking into account the needs of investors, whether they work on Bay Street or in a field on a dirt road.
She calls it “third-kid financing” – that is, financing that helps stretch the capacity for families who want to pass the farm along to the next generation beyond the first and second child, but who don’t have enough land and/or capital to make it happen.
“If you want to bring a kid home, if you want to tell them you have a place for them on the farm, relative to other options, you have to give them some predictability that they have a long-term option to stay.
“That’s the gap we work in.”
Now the company has invested in 100,000 acres, most in Western Canada. That’s where the land is highest in potential, far from urban centres, she says.
“The joke is, I go to a city you may not want to live in, and then I drive four more hours. It’s really, really great land that is primed for productivity.”
While some would-be investors have pressed for a larger share of the pie, Faulkner pushes back. Understanding how farmers think, and understanding both the economy of agriculture and the business of business, makes this work, she says.
“I am building something that has to be good for the farmer and, if it is, then it will be good for everyone. We’re trying to build a business that does the right thing.”