The province’s agricultural Crown lands overhaul went from a simmer to a boil in late 2019 — and northern ranchers are still roiling.
Crown lands were gridlocked to start off the year. The province froze all new lease agreements or unit transfers as of fall 2018, after changes to the Crown Lands Act got royal assent.
Those legislative changes were, in themselves, the latest in a process that stretches years. In late 2017, the province promised an end to the previous points allocation system, instead promising allocation by tender. That was later shifted to an open auction after a push from the Manitoba Beef Producers before being enshrined in the fall 2018 legislative changes.
The province then put a freeze on the system to develop new regulations to govern the new system, the province said.
In February, ranchers became alarmed after hearing hints that unit transfers might be on the chopping block under the new rules.
Some of those ranches owed most of their operation (sometimes over 90 per cent of their land base) to those leased lands, they argued, saying those ranches became largely useless if rights to the leased land could not be transferred with the sale of the farm.
The loss of unit transfers would wreak havoc with succession and retirement plans, they argued.
The province, meanwhile, argued that producers were improperly inflating their land values through unit transfers, something they hoped to put a stop to in the new regulations.
Consultations continued into spring and summer. Livestock producers across the board pushed for a larger herd cap, arguing that the previous 4,800 animal unit month eligibility limit no longer reflected a viable herd size.
Lease terms also raised debate, with ranchers worrying that a short lease term might negatively impact long-term farm planning, while other groups, including members of the opposition political parties and Keystone Agricultural Producers, worried that decades-long terms locked out new producers to the industry.
The issue exploded back into the spotlight in late September with the release of the long-promised regulations.
The rules sparked immediate opposition. Northern ranchers protested the shorter terms (reduced from 50 years to 15), lack of unit transfers (although family transfers were preserved in the new regulations) and rental rate increases.
Producers claimed that the regulations would spell the end of their farms.
Producers who owed most of their land base to Crown lands would face an uncertain future under the new system, they argued. Under the rules, they said, producers would have to compete for most of their land base in an open auction every 15 years, and might have that land suddenly swept out from under them if they lose. Calls quickly emerged for a first right of renewal to be added to the regulations.
Producers also protested an expected 300 per cent hike in rental rates. The province changed rental rates to reflect cattle market prices, along with pasture capacity and 3.5 per cent provincial rate of return.
Next year will be a transitional year for the rate increases, the province said, in an effort to lower the financial shock for producers. The hike will increase rates from $2.13 per animal unit month to over $7 next year. The province argues those rates have been frozen since 2014, and must increase to recoup administration costs.
Northern ranchers, however, argue the increase is too sudden and will put them under undue financial strain, particularly in light of the feed shortage impacting many of the same Crown land heavy regions.
Other issues include the province’s step back from land improvement compensation. New regulations also gave outgoing leaseholders 30 days to remove infrastructure improvements (something critics argued would be a hard sell when leases expired in winter) or reach a deal with the new leaseholder to purchase those improvements. Critics argued the system will increase conflict between ranchers.
The new rules did allow both one renewal and one transfer for existing leases to grandfather in the system. That renewal would bring lease terms up to at least 2034. Transfers would give the new leaseholder rights for the remaining term of the lease until at least 2034, but the new leaseholder would then have to compete for the lease under the new rules. Ranchers worry that will create a “race for the door,” as outgoing ranchers rush to sell their ranches while their terms have enough time on them to be attractive.
The issue drew over 350 concerned leaseholders to Ste. Rose du Lac Oct. 2 for a last-minute meeting. The meeting quickly turned heated, with producers arguing that the shorter terms and uncertain lease rollover would create a hostile environment for anyone securing financing for their operation. Producers also raised the possibility of legal action against the province.
The Manitoba Beef Producers welcomed both the auction system and removal of the 4,800 animal unit cap, but were soon pushed by northern ranchers to lobby the government to reopen the regulations.
The province quickly promised to add a first right of renewal or existing leases in light of the outrage.
“We never, ever intended to hurt any existing producers or take land away from them that are still in the business,” then-minister of agriculture Ralph Eichler said.
New leases, however, would operate under the rules as published, the province maintained.
New Agriculture Minister Blaine Pedersen has remained firm on that line. In a November interview with the Manitoba Co-operator, Pedersen maintained that only legacy leases would get the first right of renewal, while unit transfers were not on the table.
“You own land; you rent land. What they’re wanting to do is draw that lease land in to increase the value of their own land. Where in agriculture can you take rented land and add it to increase the value of your own land?” he said.
The province maintains that they consulted extensively with stakeholders while developing the new rules, although impacted ranchers say they have felt ignored.
During one meeting in Ste. Rose du Lac in October, one producer stood to say she had reached out to the province multiple times on the issue, and had got no response. Others also decried a perceived lack of consultation with existing leaseholders.
Others accused the government of purposefully waiting until after their successful re-election to release the unpopular rules. The Manitoba Co-operator reached out to the province for comment on that accusation, but did not receive a response.
The province held the first auctions under the new system in late November and early December.
The province has not released a timeline for the promised first right of renewal on legacy leases. The change requires the province to formally reopen the regulations, including a mandatory consultation period.
Impacted producers are now waiting for news on what exactly that promised right of renewal will look like.
Despite Pedersen’s comments, both producers and Manitoba Beef Producers continue to lobby the government for further changes.