Upcoming changes over how provincial Crown grazing land will be meted out is raising some dust in the livestock industry.
Manitoba Beef Producers says it won’t be shedding any tears for the existing points system, should the government go ahead with changes, but some aren’t so sure, especially about some of the finer details of the proposal.
One concern is that smaller farmers and younger farmers will find themselves at a financial disadvantage.
Bruce Berry, of Direct Farm Manitoba, says the points system rated young farmers more highly and an open auction might pit them against larger producers with more resources. Prices will also go up, he argued.
“The bids that the province receives will establish a new market price for agricultural Crown land… this is significant, as every cattle rancher who rents Crown land will see a very significant rate increase in 2020,” he said in an email.
Why it matters: The changes will affect Crown grazing leases for years to come.
Berry also noted in his email that the government didn’t seem particularly interested in hearing stakeholders, noting the required public consultations were set Oct. 30, for hearing the following evening, Oct. 31, something that was more trick than treat for those hoping for their say.
“Yep — Halloween,” he wrote. “Pretty awful.”
The province proposed changes to the Crown Lands Act late last year, when it announced it would replace the points system with tendering, a system already in place for cropped Crown lands. The shift was said to be necessary to bring Manitoba in line with its obligations under the New West Partnership, a trade deal between Canada’s western provinces. The deal requires that farmers from other member regions be able to access agricultural Crown lands in Manitoba, and vice versa.
At the time, the province expected the tendering system to be in place by fall 2018.
MBP immediately welcomed the proposal’s broad strokes, although general manager Brian Lemon raised the call for an open auction, something MBP says would allow better price discovery on Crown lands than a tender.
It appeared they would get that wish in early October. Manitoba Agriculture Minister Ralph Eichler introduced the changes to the legislature in Bill 35 Oct. 4, including the option of an auction system and new power for the province to designate community pastures.
“The auction is a step forward,” Lemon said. “Nobody liked the old system. The old system was one that was complex, was confusing, led to appeals because producers didn’t necessarily understand why they won the lease or why they didn’t win the lease.”
The ability to designate community pastures will, likewise, protect the status of those lands as community pastures, Lemon argued.
The added changes were heavily based on feedback from the beef industry, Eichler said.
Despite the wins, Lemon says the bill is still unclear on some critical details. Lease lengths are of concern to his group, he says, since a producer with a 50-year lease is more apt to invest in fencing, infrastructure and building up the pasture, a process that can take years.
Lemon suggested that, should the government want shorter leases, a first right of refusal or automatic renewal might address some of those problems.
The province argues that the points system, and its decades-long leases, actually ties up land away from new farmers, despite the extra points allocated to young producers.
“What we’re trying to do is make sure that land doesn’t get locked up for long periods of time where young producers don’t have access to it,” Eichler said.
The province has previously suggested that there is a “strong desire” for leases to be rotated through the system every five to 10 years.
“It is felt that ACL (agricultural Crown lands) in the current system is likened to private land, and that ACL as a public asset should become more available to new farmers and ranchers on a regular basis,” a June summary report read.
The report was released after consultations with stakeholders like MBP, Manitoba Forage and Grasslands Association, and the Manitoba Bison Association.
Lease details will be clarified in the regulations after the bill gets royal assent, Eichler said, something he argues will allow for more flexibility compared to a legislative change.
The same June report suggested an open auction might help address affordability, since producers would only pay the perceived value of the land.
The suggestion of a reserve, or minimum bid, has also given livestock producers pause.
Under the bill, the government would be allowed to set regulations on a minimum bid during a tender or auction.
The Manitoba Beef Producers, however, says it is concerned a minimum bid will interfere with price discovery.
“If the bill goes forward as is, we would hope to see some discussions with the government around how the regulations are presented,” Lemon said. “I think part of us recognizes that you need to do something to make sure that government’s costs are sort of covered and you can’t have auctions where there’s only one bidder bidding absurdly low, that there are costs with administering the program. Maybe there’s a better way to cover those off in a more transparent way and not necessarily have a reserve bid.”
The province limits leases to farmers or ranchers actively involved in managing the land (or a corporation where all shareholders are such farmers), a caveat that addresses some concerns that a group or company might sweep Crown lands out beneath farmers’ feet, although critics say they are concerned about a possible influx of large landowners from out of province.
Beef farmers in the Interlake, however, have expressed concern that the same protections might not keep the dairy industry in the area from moving in.
It is not a concern that Lemon shares.
“The points system certainly allowed for this convoluted and complex way of giving points to different types of producers — young producers, small producers, producers who were close by, etc. This is one where the willingness to pay is going to drive,” he said.
At the same time, he noted, the quality of the forage and of the land being auctioned typically does not meet dairy requirements.
“The guiding principle from the beef producers’ perspective is that we want to see these lands used for beef production and used in the most effective and efficient way, and if that means it’s a young producer, if that means it’s a mature producer, if that means it’s a producer from across the line in Saskatchewan, we want to make sure that these lands get used for beef production in the most effective way possible,” he said. “Not using them effectively doesn’t help us grow our herd.”
Eichler hopes to see Bill 35 pass this week and regulations in place for a spring rollout.