KAP passes resolutions on farmland access

Delegates raised concerns of private investors buying land and squeezing farmers out of the market

Access to land, particularly for young farmers, was front and centre on the second day of Keystone Agricultural Producers’ (KAP) annual general meeting.

Two resolutions related to increasing land access passed in the final day of the meeting.

The first called on KAP to lobby for tax breaks for landowners who rent or sell to young farmers.

“Young farmers just are having a very difficult time,” said District 6 director Rauri Qually, who brought the resolution forward. “Basically buying land is out of the question for us, but even to rent it is getting more and more out of the question.”

Chuck Fossay, director of grains, oilseeds and pulses, told the meeting that similar programs are in place in several American states.

Reg Dyck expressed concern that any tax breaks would be recapitalized back into the rent price and Qually agreed that parameters would need to be set.

FCC vice-president J.P. Gervais (left) responds to a question during a panel on land value and ownership. Sociologist Andre Magnan (centre) and realtor Stacey Hiebert (right) also presented on the topic.
photo: Geralyn Wichers

The second resolution, also from Qually, called on KAP to request a review of the province’s Farmland Ownership Act to “ensure that Manitoba agricultural producers’ best interests are preserved.”

The resolution seemed particularly concerned with investors buying up farmland.

“It is difficult to understand how out-of-province landownership benefits the agriculture industry,” it stated.

Mitch Janssens gave his support for the resolution and said that he pays attention to the money private investment takes from the industry — through land, the stock market, equipment and other avenues.

“We’re just struggling to break even or make small profits,” he said.

Investors resented

This resolution echoed sentiments found in a survey on landownership and attitudes done by University of Regina sociologist Andre Magnan.

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Magnan presented his findings to KAP members during a panel on farmland values and ownership.

Of roughly 400 respondents across the Prairies, most said farmland purchases in their area are made by other farmers. In Saskatchewan, respondents said roughly one in five purchases came from investors, not farmers. In Manitoba, farmers said one in 10 purchases were made by investors.

“Largely, farmers see this as something concerning,” Magnan said. They perceived investor purchasing as negatively affecting the farmland market.

Survey results overwhelmingly said that “when investors are in the area, it’s an overall negative impact on the local community,” Magnan said.

Of the farmers surveyed, 38 per cent said they expect to buy land in the next five years. Eighty-seven per cent expected to face challenges like competition, prices and lack of available land nearby.

Two per cent of farmers who rented land said their landlord was an investor.

Continued climb

In the first half of 2019, land values rose 3.5 per cent, FCC vice-president J.P. Gervais said during his presentation on the same panel. He estimated that the increase remained roughly the same for the second half of the year, though data wasn’t yet available.

Gervais said despite the challenges of 2019 and tightening of margins, he expected land values to hold steady or increase slightly in 2020.

Realtor Stacey Hiebert told the group the market appears to be flattening in terms of price per acre, but demand is strong. He said this indicates that people want to buy, but aren’t necessarily willing to pay more than the last price on record.

“If guys are being forced to pay the very top of the market, they also want the best land that they can get — and then they’re willing to pay it,” he said.

Hiebert said the price of low-valued land is continuing to climb, while higher-valued land appears to be topping out.

“With current land values, there is no ability for that land to pay for itself,” said KAP president Bill Campbell in the following question-and-answer period.

The only way it will pay for itself is with equity financing, he added.

“We need to have some type of avenue for young farmers who are not at 85 per cent equity because this land will not pay for itself,” Campbell said.

About the author

Reporter

Geralyn Wichers grew up on a hobby farm near Anola, Manitoba, where her family raised cattle, pigs and chickens. Geralyn graduated from Red River College’s Creative Communications program in 2019 and was previously a reporter for The Carillon in Steinbach. Geralyn is also a published author of science fiction and fantasy novels.

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