The Canada Pension Plan Investment Board (CPPIB) has had to absorb some criticism lately, stemming from its recent purchase of a large tract of Saskatchewan farmland.
CPPIB bought 115,000 acres of Saskatchewan farmland in 2013; but the fund is now coming under fire for artificially inflating land values, among other things. Some observers are worried that there is a disconnect between what is best for the land and what is best for CPPIB’s bottom line.
[Read the criticism of the deal here.]
CPPIB senior official Michel Leduc has responded to some of those remarks in a column published last week in the Leader Post. From the column:
CPPIB has the ability to spend money on improvements to the farms, and to own the land for decades. During that time many emerging countries will see rapid increases in population and wealth, increasing the demand for food. Saskatchewan has the potential to be a big beneficiary of this global trend.
We spent a long time studying farming dynamics before we bought this land. And we’re proud to own it.
For a long time now roughly 40 per cent of Saskatchewan’s farmland has been rented, rather than owned, by the farmers who farm it.
Within about six months of owning the land we ensured that 18 abandoned buildings were demolished, seven old storage and fuel tanks were removed, and three yard sites were cleared up.
In addition, two ponds that were being used to dump waste were cleaned out. An abandoned water well was capped. We are working on improvements to irrigation, storage and drainage.
We want to partner with local farmers to improve production techniques – and the livelihoods of those working in the sector.
CPPIB is a patient, responsible, long-term investor. We do not plan to amass huge individual holdings of farmland, or to squeeze out returns. We will make reasonable investments to improve farms and help those farmers who choose to partner with us to compete.
Read Leduc’s full column here.
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