Agcapita Farmland Investment Partnership, a Calgary based agricluture private equity firm, has a limited partnership that allows investors to deploy capital in the western Canadian farmland. The Canadian farmland premise is driven by the following factors:

1. Canadian farmland is high quality: Canada is the third largest wheat exporter in the world and in aggregate one of the largest agricultural producers in the world. The three western Canadian provinces alone have approximately 135 million acres of farmland and produce approximately 20 million tons of wheat a year.

2. Canadian farmland is low cost: Agcapita believes Saskatchewan farmland in particular is an undervalued asset. With an average price of $390 per acre, Saskatchewan farmland is some of the least expensive in the world. The prices in Alberta are almost 3 times higher than Saskatchewan at an average of $1,100.

3. Canada has world class farming infrastructure: Unlike investing in farmland in emerging markets such as Argentina, Brazil or Russia, Canadian farmland is supported by first world storage, processing, and shipping infrastructure. This infrastructure is extremely costly to reproduce.

4. Canada has low political risk: Unlike emerging markets, Canada lacks significant political risk. Canadian farmland owners benefit from a transparent and enforceable title system with no material risk of de jure or, worse yet, de facto expropriation. In practice, countries as diverse as Russia, India, Argentina, Indonesia, Kazakhstan and Brazil are already imposing or publically considering restrictions on agriculture ranging from export tariffs to proposals for outright nationalization. Removing political risk from farmland investments will be a key element in achieving returns.

5. Strong Global Macro Drivers: Canadian farmland prices are being driven by strong and persistent global market forces.
- A decreasing amount of arable land worldwide, proportionate to the increasing population;
- An increasing demand for meat calories (as development occurs and standards of living increase) which need more farmland for production than grain calories; and
- A commitment by many countries (including Canada) to increase the use of biofuels, which will need farmland for production. Current mandates alone will require over 440 million acres or over 10% of the world’s arable land.

6. Inflation – Farmland is “gold with a cash yield”: Even Inflation is accelerating across the globe and will also act to drive agriculture commodity and farmland prices much higher. Farmland has a high positive correlation to inflation and therefore is a good inflation hedge. In fact, farmland outperforms during inflationary periods. The rate of annual US money supply growth (M3 reconstructed) has actually doubled in the last 2 years – to over 16% - and virtually every major economy in the world is pursuing aggressive monetary policies as they attempt to inflate out of the current credit crisis and/or maintain growth. Money supply growth (M2, M3 and M3 reconstructed pa):

Switzerland - 1%
EU - 12%
Canada - 12%
UK - 13%
US - 16%
China - 19%
India - 20%
Russia - 48%

7. Returns: Agcapita captures both operating and capital appreciation returns by acquiring a portfolio of farmland which it leases to qualified operators on a cash rent and/or crop sharing basis. Carbon credits are aggregated and marketed to existing exchanges.

8. Diversification: It is very difficult to obtain diversification in the current market with high positive correlations between virtually all asset classes. This is a very unusual state of affairs in financial history. There are very few uncorrelated assets classes accessible to the average investor. Farmland has a small negative correlation to stocks and a high correlation to inflation. The challenge is how to cost effectively deploy capital in these areas – private equity partnerships like Agcapita allow diversification at reasonable investment levels and professional management of all the complex operational and legal elements of making a farmland investment.

EPR has begun to accumulate vineyards in California....just a fyi and fwiw