Manitoba’s beef producers want to know exactly how much those fences and dugouts are worth before Crown land parcels hit the auction block.
Northern ranchers, many very dependent on Crown land, are pushing for a third-party assessment to be added to the Crown lands lease system — something they say would reduce the chance for long and costly disputes. Such an assessment, they argue, would place a dollar value on land improvements going into an auction. Both incoming and outgoing leaseholders would therefore know what the old leaseholder is due before the bidding starts.
Why it matters: Ranchers say the move would leave less room for dispute between ranchers and save time and money by avoiding arbitration.
The topic sparked a successful resolution during the 2021 Manitoba Beef Producers annual meeting in mid-February.
“The viable production units that have been set up over all these years are being destroyed and the deeded land that was integral to these operations — the land, the corrals, even the houses — they’re going to be rendered almost worthless or at least hard to get any value out of them,” Dale Myhre of Crane River said during the resolution’s debate.
“Even if new leaseholders come in, they’re going to have the same problem. Naturally, if you have a ranch, you’re going to want to improve it, only you’re going to improve it — with these regulations — for 15 years, and then have to turn the land over to the government.”
Among the changes made in 2019, lease terms dropped from 50 years to 15. Leases then go back up for bidding in a public auction.
Current rules give leaseholders 30 days after their permit expires to remove improvements. The old leaseholder is entitled to be paid for any remaining improvements as long as that parcel gets a new leaseholder within two years, the regulations go on, but it is up to the old and new leaseholder to negotiate an amount. Should the two fail to reach an agreement within 30 days of the new lease, the matter goes to arbitration.
Ranchers have argued that those rules leave fertile ground for conflict between old and new leaseholders, many of whom may be neighbours. Removing improvements also comes with its own time and cost, they argue, while arbitration can also become a long and costly process.
The Manitoba Crown Land Leaseholders Association, which has expressed significant concern over a long list of the changes made to forage and grazing leases, expects the “wiping out of the assets and equity,” might play into its case, should it decide to go ahead with a potential legal challenge against the system.
In January, the association confirmed that it had raised enough money to start the legal process and was, at the time, exploring the viability of such a challenge.
Touted by the provincial government as a much-needed modernization of the system to increase transparency and make Crown land more accessible to new producers, changed regulations for forage and grazing leases have, nevertheless, sparked outrage from existing ranchers.
Other than land improvement values, the removal of unit transfers, which previously allowed a rancher to transfer lease rights with private land sales, has effectively frozen ranch sales and threatens to cripple retirement plans, those ranchers say.
The province, meanwhile, argues unit transfers were previously being used to pump up private land values, while farmers would not expect to be able to transfer any regular farmland rentals.
Producers later complained that a transitional transfer, promised in the original changes in 2019, disappeared in the same round of changes that added an awaited right of renewal for legacy leases. Both producers and the province said the right of renewal was critical for business consistency, since it allows existing family farms to dodge the auction when their 15-year lease terms end. Those changes came into effect in late 2020.
Significantly higher rents likewise came to a head late last year, the first time the new market-based rental formula came into full force after a transitional increase last year. While areas hard hit by drought received a break on their bills, the Manitoba Crown Land Leaseholders Association noted anecdotes of farms in other areas selling animals to make ends meet.
The province has argued that old rent prices had been fixed since 2014 and had to rise.
Shorter leases — advocated by the province to free up more land for new farmers, while ranchers argue the ensuing lack of constancy makes it harder for farmers to secure financing — has also created conflict between ranchers and the provincial government.
“It’s going to be so hard to come up with any kind of system that’s going to work as well as the unit transfer system that we had, but the government is apparently not interested in anything other than changing the whole system to something new and bizarre and so we have to at least put this resolution forward, because possibly they’ll listen to some tweaking in the system, so there would be some compensation for these poor people who are retiring,” Myhre said.
Manitoba Agriculture and Resource Development Minister Blaine Pedersen did not address MBP’s ask for third-party assessments, but noted his department is in the early stages of developing a best management practices program for Crown lands, “to improve productivity and reduce the cost of production.”