Forage leaseholders say any of their number looking to retire will be in for a tough time, should changes to Agricultural Crown Land regulations go through as tabled.
The changes, currently up for public consultation, mainly deal with adding in a first right of renewal for legacy leases — those forage and grazing leases in place prior to Manitoba’s new Crown lands system coming into effect last year.
The same changes, however, would also repeal a transitional measure, which allowed legacy leaseholders one last transfer, despite the general erasure of unit transfers in the new system.
Why it matters: The province is following through on its promise to let legacy leaseholders renew their forage Crown land leases, but producers say the actual wording of that change would also remove a critical measure for retiring producers.
Brent Benson, spokesperson for the Manitoba Crown Land Leaseholders Association, said they are “very disappointed” in that detail.
“That was a promise that was very important to many producers who are close to retiring,” he said.
Last year, producers were told that the transitional measure would help existing producers in the midst of or near retirement, since they could still transfer the rights to their lease alongside the private sale of their property. That transfer would only convey lease rights until the original leaseholder’s expiry date, and the new leaseholder would be beholden to the new system, producers were told.
Manitoba Agriculture and Resource Development Minister Blaine Pedersen suggested that transitional measure was meant to assist farm transfers actually in process when last year’s regulations first came into effect.
“Unit transfers are not on,” he said. “It’s not in the new regulation. Unit transfers are not happening.”
It is the latest note in an ongoing saga between forage leaseholders and the provincial government.
Last fall, the province announced sweeping changes to the Crown lands system. Among those, the new system enshrined an open auction for allocating leases rather than the previous points system, set up a new market-based rental formula, reduced lease terms from 50 years to 15 and did away with unit transfers.
The province then quickly promised to add a legacy lease right of renewal following outrage from producers. Leaseholders initially argued the new rules would force some ranchers to put most of their farms on the line in an open auction every 15 years.
The province argued that the new system would be more open, easier to understand and, in the case of replacing the points system, was actually asked for by the beef sector. The incoming right of renewal would safeguard family farms, the province added, since it would allow long-standing farms to renew leases without auction. Unit transfers, however, had been used by producers to artificially increase the value of their private land, the province argued, since lease rights were being linked to the farm value when it came time to sell.
Pedersen used the example of any other rented farmland. Producers would not expect to be able to sell rights to rented land along with a private farm sale, he said, arguing the same applied for forage leases.
“This doesn’t happen in the real world… The Crown owns the land. The Crown is the landlord,” he said.
Pedersen also argued that unit transfers actually encourage large Crown land sales to non-Manitobans, an issue ranchers were concerned about.
“When you had unit transfers, you could take a ranch and a large parcel of land and you were selling it to out-of-province buyers,” he said. “The concern at the auctions was that out-of-province buyers were going to come in and buy up all of these Crown land leases, which in actual fact, did not happen.”
The lack of unit transfers therefore encourages entry to new and young producers and allows Manitoba producers to expand their ranches, Pedersen argued.
Leaseholders, however, argue that doing away with unit transfers sends retirement plans into chaos, and the loss of the transitional transfer would only exacerbate the issue.
“There are a number of farmers whose farms are held up for sale right now with no interest from anyone to buy a ranch due to this,” Benson said. “They’re not viable without the ability to transfer those assets at the same time.”
Interest has quickly evaporated for those farms once buyers are informed of the Crown land hoops they would have to jump through, Benson said.
“Right now, the minister has basically frozen the sale of any ranches in northern Manitoba for going on three years now,” he said. “There are people who have health issues who can’t retire because nobody will look at their private land. It’s not grain land. It’s very poor-quality land. It’s never, ever been in grain. It’s meant to be a ranch. But it’s not viable to a bank for someone to buy that private land to have 50 cows on it or 100 cows when the ranch needs 300 or 250 to survive.”
Pedersen, meanwhile, argued that if producers were not immediately retiring, they could instead expand their farms within the auction system.
The issue recently prompted a move from across the aisle in the Legislature.
Provincial Liberal Leader Dougald Lamont recently drafted a letter to federal Agriculture Minister Marie-Claude Bibeau, asking for aid for Crown land leaseholders.
The letter requested income supports or debt relief, “to ranchers in Manitoba have are facing bankruptcy because of the Province of Manitoba’s disastrous reforms to Agricultural Crown Lands.”
The letter cited economic damage from previous floods, drought last year, as well as the marginal nature of much of the land.
“In addition to these repeated crises, ranchers on Agricultural Crown Lands have had their livelihoods undermined because of the Province of Manitoba’s decision to introduce reforms to Agricultural Crown Land leases in 2019,” the letter reads. “The province has limited leaseholders of their ability to pass on leases, which has destroyed equity and retirement incomes, and affected producers’ ability to borrow. The leasing process now also requires an auction to the highest bidder, which limits access to Ag Crown Lands for many producers.”
Pedersen, meanwhile, encouraged producers to submit their comments on the changes currently up for consultation.
Changes are up on the province’s Regulatory Consultation Portal and comment is open until Nov. 16.