Is lack of investment capital holding back the next great idea?
Access to the right financing may have left many new entrants at the starting block. However, it’s not only access to capital, but also access to the right financial structure that’s important. The ability to achieve business cash flow and gain business equity are the secret of success for many businesses.
The ability to start a venture, create value chain relationships, to build out a new market and innovate OFTEN requires financial support. Is innovation and innovators in the agricultural sector being blocked by capital access issues?
According to Agriculture and Agri-Food Canada (AAFC), the average farm value in Canada has steadily increased over the last decade, both due to the scale of operations and the appreciation of value of farmland and buildings and other assets. For new farmers, this financial scale often requires the application of innovative approaches.
In 2006, the net worth was $0.9 million for farms with only young farmer operators, compared to $2.5 million for multi-generation farms (most recent stats available). The government also indicates that farms with at least one young farmer are more likely to make use of rented land and crop sharing and marketing and production contacts (to reduce expenses and risk). None of these findings may be surprising, but do they indicate an unreasonable hurdle to entry?
Do you know what a bank or other investor is looking for when they invest in a new agri-business?
When you need investment capital who do you go to? Family, friends, financial institutions, angel investors?
In the current economic situation, are there new methods for financing a new agribusiness venture?
Are you a young farmer or do you know a young farmer who had a good idea but could not access the capital to execute the project? What was the impact of this?
If so, we would love to hear what you have to say. You can participate in this research in a variety of ways
- Complete our survey (link to survey)
- Share our project with others with links and thru social media (include link to JFAO Facebook and Farms.com Facebook pages)
- Participate in our discussions threads on OntAg.Farms.com (include a link)
- Volunteer as a case study (denise.faguy@farms.com) – what advice would you give other new entrants?
Investment in this project has been provided by Agriculture and Agri-Food Canada through the Canadian Agricultural Adaptation Program (CAAP). In Ontario, this program is delivered by the Agricultural Adaptation Council.
JFAO would also like to recognize FarmStart as a major supporter of this initiative.