Producers are still in limbo if they are looking to transfer their right to Agricultural Crown Lands.
The province’s freeze on new lease applications and unit transfers is still in effect, following the end of the points system and the adoption of tenders or open auctions last year. The province has said that applications received before the freeze would proceed as normal.
Manitoba Beef Producers general manager Brian Lemon says the freeze has likely interrupted farm sales or succession plans where farms were reliant on Crown lands. He says the impact can be “huge” for some operations that were working on deals.
Why it matters: Farmers are still in the dark about the finer details of their new Agricultural Crown Lands system, but those future rules on lease lengths, rent and unit transfers may have a big impact on business plans.
“In a lot of cases access to that Crown land lease is a significant part of their operation and not actually being able to make that unit transfer with the sale of their deeded properties, it would certainly either completely devalue their deeded properties or would cause a suspension of the deal,” Lemon said.
The province passed changes to the Crown Lands Act in late 2018, although critics at the time argued that the existing ‘points’ system was more favourable to small farms that might not be able to compete in an open auction. The province, however, responded that the points system was unwieldy and difficult to understand, a perspective echoed by the Manitoba Beef Producers, while champions of the change also said that an open auction would provide new price discovery for land parcels.
Producers are still waiting for a new list of regulations to go along with the new allocation system. Lease lengths have caused some stir in the cattle industry, along with the possibility of a minimum bid, something the province has tied to ensuring program costs are covered, but that Manitoba Beef Producers worries might skew any price discovery.
The producer group has expressed concern that shorter lease lengths, as suggested in a June 2018 report to keep leases rotating and available for younger farmers, would leave little incentive for a producer to invest in infrastructure or pasture health. It may take a decade to build up a pasture, Lemon has said, leaving little incentive in a 10-year lease. The producer group has suggested a first right of refusal might ease some of those issues.
New rent levels, rent for existing leases and the logistics of the new auction process are also expected to feature in the new regulations.
The industry had initially hoped regulations would be in place in time for fall tenders, although Lemon admitted in November that the window was closing, given the breadth of the changes.
There has been little movement announced since then, Lemon says.
The province now says the first leases under the new system may be awarded in fall 2019, “provided the necessary changes to the regulation are made in time,” according to information provided by a government spokesperson.