The province is not backing down on Crown land regulation changes, despite continued pressure from northern ranchers.
Manitoba Agriculture and Resource Development Minister Blaine Pedersen maintained that ranchers would get right of renewal for existing forage and grazing leases, but stayed firm on the province’s removal of unit transfers.
“We’ve said that we’re going to engage with the beef producers on the regulations to have first right of renewal and that helps succession planning,” he said. “That was missed in the first go around, but we’re going to fix that.
“Unit transfers, that’s not on,” he added. “You own land; you rent land. What they’re wanting to do is draw that lease land in to increase the value of their own land. Where in agriculture can you take rented land and add it to increase the value of your own land?”
The change requires the province to reopen the regulations, along with a new 45-day consultation period.
It’s been a month and a half since the province released its new regulations for Agricultural Crown Lands. The document introduced sweeping changes to how forage and grazing leases would be allocated and administered.
As well as enshrining the promised allocation by auction, regulations shortened lease lengths to 15 years, down from 50, changed the rental formula to be based on beef market prices, as well as the aforementioned changes to unit transfers. The beef sector initially welcomed the auction (which it had pushed for), as well as the removal of a 4,800 animal unit month cap on eligibility.
The changes sparked immediate outrage. Producers argued that 90 per cent or more of their ranches were leased land, and that forcing them to compete for those leases at open auction every 15 years was tantamount to putting their entire farms on the line every decade and a half.
The province quickly promised that it would change the regulations to allow existing leaseholders to renew their leases from term to term, assuming they still met eligibility requirements.
The promise failed to curb leasee anger however, with ranchers arguing that, for those who owed the overwhelming majority of their land to leases, their deeded land had little value without a unit transfer, and that the sudden removal of that right sent long-standing retirement plans adrift.
Existing leaseholders were given one transfer under the new regulations to grandfather in the program. Ranchers could transfer the existing terms of the lease to a new leaseholder until at least 2034. That new leaseholder would then be subject to the new regulations.
Producers worried that would cause a “race to the door,” as terms dwindled and lowered ranch value.
Family transfers are still allowed under the new regulations. It is unclear if a family transfer will maintain its legacy lease status. A representative from the province said terms of the promised change are still under discussion.
Pedersen also stood his ground on demands to extend the promised right of renewal to all leases, rather than just existing ones.
Critics have argued that the short lease terms create too much uncertainty for producers.
Pedersen discounted those arguments.
“If you go with anybody being able to transfer a lease, then you’re back to unit transfers,” Pedersen said. “They’re trying to find another way into unit transfers and that’s not going to happen.”
The province, meanwhile, has argued that the new system will be good for young farmers by opening up leases that were previously tied up by long lease terms.
Pedersen urged young and concerned producers to speak to Crown lands staff about their individual situations.
The changes have made the province few friends among northern cattle producers, many of whom say they feel ignored by the provincial government.
Arvid Nottveit of Peonan Point says the issue is still at a boiling point in his area of the northern Interlake.
“I don’t know what more we can do to make the government reconsider these ill-advised changes,” he said.
Nottveit leases about 9,600 out of the 10,000 acres he operates.
The rancher argued that he has seen little hard evidence that the changes will benefit the cattle industry, as the province maintains.
“Fifteen years in the cattle business, that’s nothing,” he said. “It takes a lifetime to build a herd. I know you can’t borrow money against your lease, but if your lending institution sees that for the duration of the loan, which is often 25 years, that you have security to your leased land, then they’re more apt to say, OK, he’ll be able to make his payments.”
“They’re gambling a lot of people’s livelihoods on an opinion and it’s an opinion that, if it’s wrong, will not cost them their jobs or cost them any money, but it will sure damage the livelihoods and financial situations of everyone who holds Crown lands lease. To me, it’s just unconscionable, really,” he added.
Oli Olson, who ranches in the same area, echoed Nottveit’s complaints. Two years of drought conditions have hit hard, he noted.
“We can’t afford much of an increase of anything,” he said.
Sixteen municipalities have announced a state of agricultural disaster this year as feed falls short.
Ranchers in their area have felt “somewhat betrayed” by the provincial policy, Olson said.
“We were pretty strong political supporters of our Conservative government here and it looks like it’s implementing programs that are going to make it very, very difficult for us ranchers in the north who are relying 80 to 90 per cent on Crown land to keep our operations going,” he said.
Olson owns 1,100 acres of the 24,000 he operates.
Nottveit did praise the promised renewal for legacy leases, but added that there are “still several key issues,” that need to be addressed, such as the new rental policy expected to increase rates by 300 per cent next year. Some of those leases have yet to recover their production capacity after the 2011 flood, he argued.
The province argues that the $2.13 per animal unit month fee has been stagnant since 2014 and the increase to just over $7 per AUM is necessary to recoup costs.
The promised renewal does also stand to help him, Olson acknowledged, since he was not looking forward to bidding on his own improvements to the land.
“There wasn’t too much of anything else there in the first place when my grandfather first settled in here,” he said. “He came here and there was no competition for the land and he could barely find enough feed for 50 cows. Through the five generations of us who have been ranching on here, from my grandfather down to my grandson now, we’ve worked it up to where we can handle 700 or 800 cows in a normal year.”
The province has not yet released a timeline for the promised legacy renewal. Pedersen says the province must adhere to the required consultation process before moving ahead.
While the province has not budged on Crown lands regulations, it has announced its intention to streamline Crown land sales, something producers have said would dodge many of their issues by buying leases outright.