Dear friends,

I’m excited about theopportunity to workwith old friends andmeet new people asDirector of Acquisitionsfor HAIG. As thisnewsletter describes, there are anumber of ways that we can worktogether to further our mutual businessobjectives in the production agricul-ture sector. As a buyer of high-qualitycropland, orchards and vineyards forour managed investment accounts,HAIG is expanding its focus acrossindustries and geographic regions.We can help you structure a newacquisition or a sale lease-back of anexisting property to help meet yourintegration needs, while freeing upcapital to improve your balance sheetor expand other aspects of your business. In some cases, we caneven assist you with the development of permanent plantings. Please take a minute to read through this initialnewsletter and then call or e-mail mewith your comments, impressions,and questions. I look forward tospeaking with you and meeting you.

Sincerely,

Kenneth WarlickP.O. Box 78500Charlotte, NC 28271-7035(704) 604-2988617-210-8616 faxkwarlick@hnrg.com

MESSAGE FROM KEN

A Publ icat ion of Hancock Agricul tural Investment Group

The Hancock Agricultural Investment Group (HAIG) is enhancing its sourcingstrategy for U.S. farmland investments. Withthe addition of Kenneth Warlick in the newly-created role of Director of Acquisitions, HAIGseeks to complement and expand its currentacquisitions program to meet the needs of itsgrowing client base. (See complete write-up on Warlick on page 4.) Currently, most acquisitions are sourced through HAIG’s U.S.property manager, Farmland ManagementServices (FMS) and their network of farmmanagers, tenants, brokers and other contacts.This network will continue to source propertiesfor HAIG clients.

Develop Strategic Alliance PartnersIn his new position, Warlick will call directly onintegrated agribusinesses and owner-operators inan effort to develop “strategic alliance” partnerswith these entities in a number of industries,

Acqui s i t ions UpdateSummer 2007 | Vol. 1, Number 1

Update

HAIG Expands Acquisition Resources

including wine, produce, fruit, nut, grain andnatural/organic food sectors, among others.

The Strategic Alliance Works as Follows:(see diagram next page)� HAIG acquires properties for its client

accounts� Strategic partner leases property from or

manages property for HAIG� HAIG client receives income from cash

lease or crop sales� Strategic partner retains crop (if leased) or

a management fee (if directly operated) � Strategic partner maintains control of the

land resource without affecting its balancesheet or improves balance sheet with sale of previously owned property

� This makes strategic partner’s capital available for other operations

� HAIG clients benefit from high-quality, well-managed investments

Continued on page 3

The farmer would like to buy another 640 acres of irrigatedcorn ground and add another 2,400 head hog finishing unit tothe operation.

Acqui s i t ions

2

UpdateUpdateHow HAIG Can Help an Integrated Hog-Corn Operation Grow

“Developing direct strategic alliances

with major land owners and

agribusinesses and expanding

coverage around the country, while

continuing to tap into FMS’s skills

and track-record, really sets HAIG

apart on the acquisitions front,”

Farmer owns and operates a 4,800 hog finishing facilityadjacent to his 1280 acres of irrigated corn ground.

1

VS

Due to capital limitations, farmer can only undertake one of the projects, but both investments are deemed necessary for permitting reasons.

3As an alternative, the farmer could have sold HAIG hisowned corn ground, cash leased it back from HAIG, andused the land sale proceeds for the acquisitions.

4

By working with HAIG, HAIG buys land and leases tofarmer under a long-term agreement. Farmer can build the additional finishing unit and utilize the new land fornatural fertilizer applications.

5

2

Initial efforts will focus on direct contact withlarge vintners, integrated vegetable producers aswell as growers, packers and canners looking tofurther integrate and large orchards, packersand food processors with cropping integrationneeds. In the area of organic/natural foods,Warlick and HAIG hope to work with largeretailers, processors and purveyors in need ofreliable product sources. Seed companies andlarge turf/sod growers may also fit the strategicalliance model, along with other large farmingoperators and land owners seeking to redeploycapital from farming assets to other parts oftheir businesses.

As Warlick notes, “We view the strategicalliance partnership as a way for agribusinessesto retain a consistent supply of commodityproduct for their operations while freeing upcapital that can be used to enhance or expandtheir businesses. They meet their goals, andHAIG meets its client goals by investing inhigh-quality properties capable of generatingincome and appreciation returns. Workingtogether in partnership benefits both investorsand business owners/landowners.”

Geographic and Crop FocusGeographically, Warlick plans to expandHAIG’s acquisition prospects by targeting particular crops and regions where he willdevelop a network of landowners, realtors, farmmanagers and lenders to identify acquisitioncandidates. Some of the initial crops andregions targeted include grains in Nebraska,Colorado and Idaho; fruit, vegetables and sugar crops in Florida, Washington, Oregon,Michigan and the Texas Coastal Bend; as wellas farms and dairies in Arizona’s Central Valley,Texas High Plains and the Midwest. Any live-stock exposure will be passive through a propertylease-back to the operator. Most row crops willalso be cash land leases, while some permanentcropland may be directly-operated.

Sale Lease-back Opportunities An example of a successful sale lease-back currentlymanaged by HAIG for one of its clients is a 371-acre vineyard in Northern California (see side-bar). A local winery developed the property frombare ground, but sold it to HAIG in order to freeup capital for other business activities.

“We view the strategic alliance partnership as a way for agribusinesses to retain

a consistent supply of commodity product for their operations while freeing up

capital that can be used to enhance or expand their businesses. They meet their

goals, and HAIG meets its client goals by investing in high-quality properties

capable of generating income and appreciation returns. Working together in

partnership benefits both investors and

business owners/landowners.”

The long-term lease assures the wineryof a reliable grape supply and the ability to manage the property to meet vintner wine-making specifications. The “right of first offer” allows the winery to make the first bid on the property if HAIG decides to sell it.

Key agricultural sector credit providers aswell as industry groups are also on Warlick’sradar screen as sources of information andreferrals on land-owners looking to sell properties. While Warlick is expanding HAIG’sacquisition outreach to the productionagriculture and agribusiness sectors, FMS willcontinue as an acquisition source, particularlyin California’s Central Valley where the firmmanages over 21,000 acres of permanent cropland for HAIG clients. Working together,Warlick and FMS seek to grow HAIG’s role asa capital source for farming enterprises whileexpanding the scope of available properties forits investment clients.

“Developing direct strategic alliances with major land owners and agribusinesses and expanding coverage around the country,while continuing to tap into FMS’s skills andtrack-record, really sets HAIG apart on theacquisitions front,” says Warlick.

For More Information on HAIG’s Programs and Potential Property Sales Please Contact Ken Warlick at: P.O. Box 78500Charlotte, NC 28271-7035(704) 604-2988617-210-8616 faxkwarlick@hnrg.com

Continued from front page

Location: Northern California

Purchase Date: 5/7/1997

Purchase Price:$4,208,625 ($11,822/net acre)

3/31/07 Market Value: $6,240,000 ($17,528/net acre)

Property Configuration:371 gross acres, 356 net acres, planted to wine grapes in 1996 and 1997.

Varieties: Chardonnay, Merlot, Petite Verdot, Zinfandel, Cabernet Sauvignon, Petite Sirah and Sauvignon Blanc

Lease Term: 15-year fixed rate, based on invested capital. In addition, winery retains “right of first offer” to purchase the property if the client ever wishes to sell.

Leased Wine Grape Property Highlights

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Hancock Agricultural InvestmentGroup is a division of HancockNatural Resource Group, Inc., a registered investment adviserand wholly-owned subsidiary of Manulife Financial Corp.

Farmland Investor is publishedby Hancock Natural ResourceGroup, Inc., Boston, MA, for the institutional investmentcommunity. It is distributed with the understanding thatHancock Natural ResourceGroup, Inc. is not renderinglegal, accounting or other profes-sional services.

For further information on any of the topics covered inFarmland Investor, contactJeffrey A. Conrad, CFA, HAIGPresident at (617) 747-1601 or visit our web site atwww.haig.com.

Ken Warlick, an agribusiness professional with 23 years of experience managing food and fiberindustry investments, has joined HAIG as Director of Acquisitions. In this new position, Mr. Warlick isresponsible for sourcing farmland and orchard properties across North America and other selectregions to meet the investment objectives of HAIGclients. Working directly with integrated agribusi-nesses and farm owner-operators, Mr. Warlick’sefforts complement HAIG’s current acquisitions network. Prior to joining HAIG, Mr. Warlick held senior positions with several prominent agribusi-ness lenders, including the John Hancock Bond and Corporate Finance Group. He brings extensiveexperience in all aspects of financial analysis,

property evaluation, risk management and contractnegotiation within the food and fiber industry. Areasof specialty focus include fruit, nuts, grains, cotton,dairy and other edible crops.

Mr. Warlick earned a B.S. in Agricultural economics and an M.A. in Agribusiness from Texas A&M University. He also earned a degreefrom the Southwest Graduate School of Banking atSouthern Methodist University. He is a member ofthe American Society of Farm Managers and RuralAppraisers, the Land Managers Association andnumerous industry associations. Mr. Warlick grewup in a farming family near College Station, Texasand retains an interest in his family farm in BurlesonCounty. The farm is currently leased to a local

operator and planted to improved pastures for hayand beef production.

HAIG President, Jeffrey Conrad, commented onwhat the addition of Warlick means for HAIG, “Ken’sunique understanding of both production agricultureand food processing segments of the food systemsets him apart in the industry. HAIG is fortunate tobe able to tap into his expertise and experience insourcing investments to meet the needs of ourexpanding client base. The ability to add this type of resource to our acquisition program affirmsHAIG’s continued leadership role in the farmlandinvestment market.”

Ken Warlick Joins HAIG as Director of Acquisitions

Acqui s i t ions UpdateUpdate