To keep more farmland in the hands of farmers, put a levy on sales of it to those who buy land but don’t plan farming it themselves.
That’s a proposal put forward as a resolution at Keystone Agricultural Producers’ annual general meeting and supported by delegates last month.
This would be a support to younger farmers who find land prices rising beyond what they can afford and find themselves outbid by outside investors with much deeper pockets than their own, said delegates.
The resolution asks the farm organization to lobby the province “to explore the possibility of initiating a five per cent levy on farmland sales prices for any investor who buys farmland and has not been actively farming within three years.”
Further, the resolution proposes that cash raised from these levies be put toward the Manitoba Agricultural Service Corporation’s Young Farmer Rebate program.
Broady Erb, a District 3 delegate, who spoke to the resolution said this would be an approach not unlike what B.C. tried in 2016 when it placed a surtax on foreign homebuyers to tackle Vancouver’s housing affordability crisis.
“This wouldn’t shut down the market nor prevent investors from purchasing land,” he said. “But this would even the playing field for someone who actually wants to farm the land.”
Just how much outside investor land purchasing actually goes on in Manitoba and/or how it may be influencing land prices is something academic researchers hope to learn more about in future.
Annette Desmarais, a sociology professor at the University of Manitoba, was a guest speaker at the KAP convention.
Desmarais said she was pleased to see KAP’s resolution supported.
“We are going to have to think outside the box around this question,” said Desmarais who is also the Canada Research chair in Human Rights, Social Justice and Food Sovereignty.
Desmarais is the lead researcher on a project called “Changing Land Tenure and Food Sovereignty on the Canadian Prairies,” that aims to map the changes in farmland tenure as well as analyze its social and environmental impacts.
She presented findings of a study funded by the Social Sciences and Humanities Council of Canada tracking farmland sales between 2002 and 2014 in Saskatchewan.
The research was prompted by a massive land purchase in 2013 by the Canada Pension Plan Investment Board (CPPIB) when 115,000 acres of farmland, the single largest farmland purchase in the history of the province, set off a public debate about who was buying farmland, Desmarais said.
“We wanted to contribute to this public debate by looking very closely at who exactly was buying this land, how much of it and where in the province,” she said.
Their analysis ultimately showed a small fraction of land — 1.44 per cent of total farmland acres — in the province was owned by investors by 2014. However, the amount of land they’d picked up in between 2002 and 2014 rose sixteenfold — from 51,957 acres in 2002 to 837,019 acres by 2014, she said.
The purchases were concentrated in certain municipalities and when the transactions in those localities were looked at more closely it revealed a distinct pattern, Desmarais said.
“In those places they were actually accounting for up to 20 to even over 30 per cent of all farm transactions that took place in those RMs,” she said. Moreover, prices paid were significantly higher — anywhere from 39 to 72 per cent more — when compared with other transactions, such as land sold farmer to farmer or between family members.
Land investors argue they don’t influence land prices but the conclusions drawn from this research is that they do, said Desmarais.
“It’s really difficult to argue that their presence has not contributed to a significant rise in the price of land.”
Desmarais, whose research team included colleagues from the universities of Saskatchewan and Regina, said the aim is to do similar studies of farmland tenure in Alberta and Manitoba in future. With so much farmland in the three Prairie provinces, this is a critically important phenomena to understand, she said.
“What happens in this region around agricultural land is really, really important,” she said. “All we want to do is get the lay of the land, what’s happening, and what’s the impact of any of the changes that are taking place.”