Farmers, not investors pushing up land price

Should Canadian-owned companies be allowed to speculate in Manitoba’s farmland market?

Don’t blame pension funds for rising Manitoba farmland prices, blame expanding farms and low interest rates, says Gordon Daman, a land appraiser and president of Red River Group.

“This has nothing to do with outside investors,” Daman told the Keystone Agricultural Producers’ (KAP) General Council here Oct. 29.

“I can assure you that the Ontario Teachers’ Pension Plan is not a bunch of evil Ontarions coming to raise the price of land. They are quite sophisticated… they get appraisals done before they purchase something. Do they have some influence in the market? Absolutely, but I don’t think the influence that they have is as broad and as wide as we believe.”

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Pension funds want to get a four to eight per cent return over 20 to 30 years, Daman said.

What’s driving the market is farmers who want to buy land close by, especially if they are building for the next generation, he said.

Motivated buyers will pay 30 per cent more to ensure they get the land, and that sets a new floor price.

“By and large producers push the market and it comes down to assemblage,” Daman said. “I’ve seen this time and time again. “It’s the invisible hand of the marketplace, economics 101…”

Canadian companies are free to buy Manitoba farmland in hopes it will appreciate in value earning profits for Canadian shareholders. But should they be?

Board chair Greg Perchaluk of Roblin questions it.

“I don’t know about speculators,” he told reporters. “For me I don’t think so. I think land prices should be determined by producers. Keep the speculators out, I think.”

Perchaluk praised the extensive consultations the Saskatchewan government had earlier this year on its farmland ownership act. As a result amendments are planned, including, prohibiting foreign lenders from mortgaging Saskatchewan farmland, which would allow them to own the land on foreclosure. That provision is already in Manitoba’s legislation, he added.

“I think we’re a little bit ahead of them (Saskatchewan), but there’s always room for improvement, always,” Perchaluk said.

About the author


Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.



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