In today’s world, there is an imbalance between supply and demand globally, with food demand continuously rising. Experts predict that food crises will overtake oil as the number one economic growth threat. In recent years, global smog has become more frequent, environmental pollution has worsened, and food safety issues have become a significant concern for public survival and development. On the other hand, after nearly four decades of reform and opening up, China has rapidly risen and developed, with significant economic strength. Against this backdrop, an increasing number of Chinese individuals are realizing the desire for a safer, more stable investment and lifestyle.
There are countless ways to achieve this goal, but one of the most secure, quick, and potentially unlimited ways is to invest in a farm in Canada, a country with open policies, where one can have a piece of permanent land to call their own and fully flourish.
Buying a farm in Canada not only provides you with a dreamlike pastoral landscape and a comfortable lifestyle but also serves as a highly rational investment project. Not only will it preserve the value of land and steadily appreciate, but it also offers benefits such as self-employment immigration for farm owners and various policy advantages.
As for how to purchase a farm and manage it afterward, there are three key issues to address. Experts at our center will outline these and provide targeted advice in the following sections.
Key One: How to Choose a Farm
A journey of a thousand miles begins with a single step—The first and most important factor in purchasing a farm is choosing the right one to invest in. Selecting a farm is like building a house; choosing the right one is like constructing a grand and lasting mansion, while choosing the wrong one is like stacking precarious eggs, which could lead to endless troubles.
As we all know, the Niagara Falls region is famous worldwide for its vineyards and wineries. Recently, a Chinese client, Mr. Li, shared his frustrations with our experts: he purchased a vineyard in this region at a high price, carefully tended it, and intended to use it for wine production. Now, at the peak of grape harvest season, Mr. Li couldn’t sell a single box of grapes, and he was extremely anxious. Our experts visited the site and discovered that although the region’s soil and climate conditions were perfect, Mr. Li had chosen the wrong variety of grapes. The variety he planted could only be used for juice production and not for wine making. Additionally, in recent years, the grape product market has undergone significant changes—while the winery industry is booming, the juice industry is struggling. Previous grape juice companies in Canada have all shut down, and no one is buying such grapes. Meanwhile, grapes for juice production are priced much lower than those for winemaking. Mr. Li finally realized that his poor choice had resulted in a huge loss. Our experts pointed out that his only two remedial options were: first, to maintain the status quo and sell the grapes for juice in nearby U.S. cities like Buffalo; or second, to dig up the current grapes and replant a variety suitable for winemaking.
There is an old Chinese saying: “Man can conquer nature.” Lao Wang, a senior immigrant from Shandong, bought a large farm an hour and a half outside of Toronto 15 years ago, attracted by the low price. The soil on the farm was originally suitable for growing pasture grass, but Lao Wang, driven by the spirit of “man can conquer nature,” undertook a large-scale, long-term transformation of the farm. He invested considerable funds and manpower to improve the soil and irrigation systems, planting various vegetables. This 14-year, time-consuming transformation ultimately failed spectacularly—the soil remained unsuitable for growing vegetables. After years of losses, Lao Wang was forced to sell the farm at a low price. The new owner, however, restored the farm to growing pasture grass, and it is now lush and thriving.
These examples clearly demonstrate the importance of choosing the right farm. In general, when purchasing a farm, it is essential to consider multiple factors such as the environment, climate, soil, crops, relevant policies, and market trends. Only by doing so can you lay a solid foundation for successful management, clarify your goals, and avoid making impulsive purchases and incurring unnecessary sunk costs.
Key Two: How to Save on Investment
Secondly, purchasing a desired farm at a reasonable price is also an art. Knowing that Chinese buyers tend to negotiate, some farm owners deliberately inflate the selling price to target Chinese investors. For example, a ginseng farm south of Toronto was valued at approximately CAD 600,000, but the owner was asking CAD 750,000 from Chinese buyers. After six months without a sale, the owner approached our experts for assistance in selling the farm. In the spirit of protecting the interests of Chinese investors and being responsible to our clients, our experts immediately stated that unless the price was reduced to CAD 600,000, treating Chinese investors fairly, we would not take on this case. Due to our firm stance, the farm owner eventually lowered the price, allowing a Chinese investor to purchase it at a fair price.
Due to information asymmetry, some local farm owners believe that Chinese investors are unfamiliar with the Canadian agricultural environment and have limited knowledge of farm project prices, leading to price inflation or even unreasonable pricing. However, because our center has been continuously tracking and researching farm price trends, we are well-versed in the market prices, evaluations, and relevant policies for various types of farms. This allows us to control critical price points during the buying and selling negotiation process. Furthermore, to protect the interests of Chinese investors, once our center accompanies an investor on a site visit and they express interest in purchasing, we will not bring other clients to visit the same property and raise the price. We are committed to being fully responsible for each client, ensuring they acquire their desired farm project at the most reasonable price.
In addition, whether it is possible to legally avoid taxes is a key factor in controlling investment costs. Previously, a client, Ms. Cheng, invested CAD 1.6 million in purchasing a farm near Toronto. However, a friend later informed her that she had overpaid for the farm, so she brought all her documents to the China-Canada Agricultural Center for professional advice. After reviewing her documents, our experts informed her that, with the proper application of relevant policies, she could have saved approximately CAD 200,000 in taxes. Ms. Cheng was angry when she learned this, suspecting that the real estate agent had taken advantage of her lack of English proficiency and deceived her, and she considered filing a complaint. Our experts pointed out that at this point, there was no chance of winning a case, as the real estate agent had not broken the law; all the procedures and documents were legal. The real issue was that the agent was unfamiliar with specific agricultural policies and market conditions, which led to the missed opportunity to take advantage of tax-saving policies. Ms. Cheng’s case is not uncommon, but in reality, if one thoroughly understands the relevant policies before investing in a farm, these costs can be saved.
Key Three: How to Manage a Farm
Once a farm is purchased at a reasonable price, how to properly and sustainably manage it becomes crucial. About five years ago, a friend of ours, Mr. Liao from Guangdong, invested in over 100 acres of farmland near Toronto. Given the recent strong returns from the garlic market, Mr. Liao decided to plant garlic on a large scale. To create a better growing environment, he spent a significant amount of money demolishing the old house on the property and built new housing, greenhouses, and workspaces. He also hired many Chinese workers to help with the farming and conducted extensive promotional and expansion work.
However, things did not go as planned. After four or five years of hard work, all his efforts were in vain: the garlic was constantly infested with pests, with the problem proving difficult to control; the yield was small, and the quality was poor, leading to a decline in sales and annual losses. Ultimately, Mr. Liao had no choice but to sell the farm at a low price and let the workers go. Not long after, our experts were invited to visit the farm, and they discovered that the local soil and climate were actually very suitable for garlic cultivation. Moreover, Mr. Liao had sufficient funds and labor. The only mistake he made was that the technical support and updates were not kept up to date during the farm’s management process. Specifically, regarding garlic’s susceptibility to pests and diseases (such as root maggots [Nematode Pest] and Fusarium basal plate rot [Fusarium Basal Plate Rot]), the staff had been using traditional Chinese methods to prevent and control pests, which were ineffective and counterproductive, leading to the current state of the farm—desolate and regrettable, a real shame.
The lessons from Mr. Liao’s experience are worth reflecting on and learning from. At the same time, there are many inspiring examples as well.
The numerous examples above clearly illustrate the three key points to consider when purchasing a farm: proper selection, price control, and sustainable management. What you invest in is your future, and the returns you gain will be life-changing!
News source:https://www.ccagr.net/index.php/canada-farm-land-value-report-2013.html
