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Better data on landownership crucial to protecting farms

Nobody knows exactly what’s happening with farmland sales and how many sales are to non-farmers

Much better national information on landownership is crucial to ensuring Canada’s food-producing capacity can keep growing, says Dan Mazier, president of Keystone Agricultural Producers.

Mazier, along with his counterparts from the Agriculture Producers Association of Saskatchewan and the Alberta Federation of Agriculture, told the Senate agriculture committee the dearth of data on landownership is a key stumbling block to protecting it.

“We urge the federal government to consider devoting more resources to collecting more comprehensive data on this issue,” he said. “Such information is needed to make clear, factually based claims of what the main causes of the problem are.”

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The federal government needs to encourage provinces and municipalities to institute clear, consistent and robust rules that protect this important resource, Mazier said, adding farmland needs to be viewed by all actors across Canada as a valuable, but limited, natural resource that is in need of substantial protections. He said the government should limit farmland ownership by non-farmers.

The government also needs to protect farmland from incursions such as pipelines “and place limits on those intending to repurpose farmland for other, non-farming uses.”

Land prices have risen in the last few years driven by higher commodity prices, low interest rates and the interest in non-farm groups in acquiring land.

Mazier noted that in some years, Manitoba displayed the highest increase in farmland values amongst the provinces.

Rising farmland values are accompanied by higher municipal tax bills, which further squeeze any producer looking to expand or enter the business, he said.

“The simple principle of supply and demand leads to a situation where people are paying higher and higher prices to buy the limited amount of farmland that is available for sale,” he added. “Bidding wars are becoming common when it comes to the sales of farmland.”

At the same time, “many farmers are seeking to acquire additional land so when they retire and pass on the family farm to their children or other family members, they will be in a position to divide it up into multiple parcels of land that can financially sustain a family.”

Other players in the landownership issue are institutional investors such as well-financed conservation, environmental groups and foreign buyers who can outbid farmers for land. Then there are the municipalities seeking to expand into rural areas.

“Finally, and most obviously, there is a limited supply of farmland available to those seeking to purchase it,” he noted. “There is no doubt that a substantial portion of the approximately four million hectares of farmland lost between 1971 and 2011 was tied to urban development.”

Farmers who can afford to buy land now might not be able to withstand the shock of a sudden rise in interest rates, he continued.

“It seems imprudent to assume that commodity prices will rise and continue to stay on the high side of averages into the future,” Mazier said.

KAP is also concerned about farm debt loads.

“We are creating a situation where farmers and Canadian agricultural production in general are becoming very vulnerable to a market of interest rate changes,” Mazier said.

APAS president Norm Hall noted Canada is currently the sixth-largest grain-exporting nation, making the issue an important one here.

“Preserving productive agricultural land is critical if we are to maintain our competitive position in the international marketplace,” Hall said. “It is also a very important moral issue, as the world needs to produce 70 per cent more food by 2050 to feed our growing population.”

Saskatchewan has limited farmland purchases by pension plans and other institutional investment firms and APAS says more needs to be done to assist young producers and new entrants who struggle to acquire the capital to enter the industry or expand their land base.

“Another area concerning the future of farmland ownership is our ability to compete with alternate land uses, such as urban growth, recreational uses and rural residential development,” Hall said. “In our view, the most important way to protect farmland from these competing land uses is to ensure that primary producers are profitable enough to compete.”

He said there’s a pressing need for clearly defined government policy in this area.

“We need to ensure that the right to farm our land is expressly respected and understood in federal, provincial and municipal legislation, and in regulations and government policy,” Hall said. “We also recognize the need for more data about landownership so we can understand the trends and developments and better develop policy.”

AFA president Lynn Jacobson said much of Alberta’s population growth has occurred between Calgary and Edmonton, which is also where much of its best farmland is located. Expanding food production elsewhere means using poorer-quality soils.

Alberta also faces a challenge with 150,000 abandoned well sites on agricultural land in Alberta that needed to be reclaimed, he said.

“Reclamation procedures can greatly improve crop production potential,” Jacobson said. “However, the soil cannot be returned to its original state. Industrial growth in the form of oil and gas wells, plus batteries, gas plants, windmills, electrical transmission, and the roads that lead to the industrial sites, all continue to utilize farmland in the province.”

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