Northern beef producers say they stand to take a big hit on farm value, should unit transfers not be on the table when the province releases their Crown lands regulations.
The province froze both new Crown land leases and unit transfer applications in the wake of changes to the Crown Lands Act, pending a review. In October 2018, the province passed legislation that officially allowed lease allocation by free auction rather than the previous points system.
Why it matters: Unit transfers are critical to farm value, many northern ranchers argue, and they’re worried that Crown land changes might end the practice upending their business model.
The continued freeze has sparked concern as the calendar ticked over into 2019. In early January, Manitoba Beef Producers general manager Brian Lemon noted that the freeze may have interrupted land deals where farms owe the bulk of their grazing capacity to Crown lands, and for whom Crown land access is intrinsic in the value of their farm. Any of those farmers hoping to retire, sell their farm or who were in the midst of succession planning have been stalled by the freeze, he noted.
That situation will turn dire if the unit transfer system disappears, producers in northern agro-Manitoba now warn.
Bob Bileski, who farms in the Municipality of Mossey River, south of Lake Winnipegosis, says about half his farm is leased Crown land. He now worries that he will lose much of his retirement income if he cannot transfer those rights alongside his deeded land.
“It would have a catastrophic effect if I can’t sell my ranch as a unit,” he said. “The private land that I own is intertwined with a lot of the Crown land, so without the Crown land attached to it, the privately owned land becomes very low valued.”
Such a move would undercut the investment he has spent decades building up in his farm, “with a stroke of the pen,” he complained.
Bileski had opened talks with a real estate agent, but was told that any sales have stalled until new regulations are settled.
“There’s going to be producers who have built equity in an operation on the promise and the principle that was always there, either in law or in practice, that unit transfers would be part of their retirement strategy,” Lemon said. “I think we need to think about fairness in terms of taking that promise away from them, if that’s what the province wants to do.”
At the same time, he said, that access to Crown lands is critical to farm viability and will impact efforts to attract producers to those regions.
Dale Myhre of Crane River estimates that Crown lands account for up to 90 per cent of some farms in the north.
Local producers were hopeful when the current provincial government was elected, Myhre said. Producers in his area hoped that the province would streamline Crown lands rules, including a jump in allowable animal units and the ability to buy Crown land that farmers had worked for decades and hoped to further develop.
The freeze, and rumours that the unit transfer system was in jeopardy, was met with surprise and dismay, he said.
“No one is going to want to come and invest in their ranch if they find out the lease only goes for so long,” he said.
Myhre argues that Crown lands leases will become less friendly to long-term renters and offer less guaranteed tenure and less incentive for investment without unit transfers.
No hard no
The province has not confirmed any changes to the unit transfer system, saying only that the review is ongoing.
“As part of the review, I guess, all options are on the table for consideration, but it’s far too early to make any kind of determination as to where unit transfers may or may not go,” said Chris Budiwski, director of agri-resource and agricultural Crown lands with the province.
Manitoba Agriculture Minister Ralph Eichler said the province is aware of the concerns around unit transfers. Those concerns do feature in the Crown lands conversation, Eichler said, but did not confirm or deny whether the province was considering an end to the unit transfer system.
“What we’re doing is consulting with all producers in order to make sure we get it right,” he said. “We have not made any statement to that effect, and I want to be very clear that we will continue to consult with Manitoba beef producers as a group and individually.”
Eichler says he heard concerns from northern producers during his Ag Days 2019 appearance in January and acknowledged their “unique circumstances.”
At the same time, the province has suggested that Crown land must be kept available for incoming young farmers, something potentially at odds with long-term leases.
“We’re looking at all those options to make sure, again, that we get it right,” Eichler said. “Quite frankly, that land is not theirs. It belongs to the people of Manitoba and it has happened where farms have been sold with Crown land leases, but that don’t give young producers that opportunity, so we have to, again, make sure that we have an opportunity for our young producers. A lot of them have been waiting many, many years for that land to become vacant so they can bid on it accordingly, but up until now they have not had that chance.”
The province will return for another round of consultations after the new rules are developed, he added.
Myhre, however, says he does not feel the province has adequately consulted producers who stand to be directly impacted if unit transfers hit the chopping block.
“They haven’t been kept up to date on what’s happening,” he said. “They’ve been affected the most by the freeze that the government’s put on all the activities and they don’t have much of a voice. They’ve been kind of surprised and, I would say, a little bit frightened, by what they’re starting to hear that’s going to happen, especially in regards to Crown land unit transfers.”
Producers from the area recently met with MLAs from Swan River and Dauphin, he said. Bileski has also met with MLAs and has expressed his concern to Eichler’s office.
The province hopes to complete the review by summer 2019.
That’s not fast enough for Bileski.
The province first made moves to update the Crown lands system in late 2017, he pointed out, changes that were not passed into legislation until fall 2018.
“It’s kind of difficult to make day-to-day decisions when you’re likely going to be frozen for two years,” he said.