The demonstration was organized by the NFU Youth Caucus and Farm Workers’ Working Group. The goal was to demand protection of food sovereignty and help farmers, especially young ones, gain more access to farmland.

Why it matters: Investor ownership represents a major barrier for Canadians to enter a shrinking agriculture industry.

NFU Youth president Jessie MacInnis said young farmers in particular have been feeling the strain of a lack of access to affordable farmland.

“As young people, this is a really critical issue,” MacInnis said. “There are already so many barriers for young people to get into agriculture, and the fact that land prices have risen so much due to the speculative nature of farmland now… that’s a barrier that’s hard for all of us to overcome.”

The demonstration was part of the NFU’s “Lobby Day” ahead of its annual convention, running Nov. 23-25 in Ottawa.

“We’re here today, as one of our lobby asks, to ask the federal government to have discussions with provincial lawmakers to talk about ways that we can actually ban all farmland investment,” she said.

“Essentially, we just want to keep the farmland in the hands of farmers and keep it accessible for young people.”

Ontario farmer Rav Singh said she has had trouble finding land since she began farming two years ago.

“I cannot afford to buy my own land because, again, land prices are increasing.

“We are the next generation of farmers and we are facing a lot of land speculation, the cost of land is rising, which means it is harder for us to start our farms and operate and have job security,” Singh said.

“It’s really important for me to support causes like this, because I would like to continue growing food for as long as I can.”

Singh did not come from a farming background, and lived in the city her whole life before she began farming.

“Up until recently, a lot of people who were farmers were intergenerational farmers. But now, it’s a new wave of people coming in.”

Singh said she thought the wave of young people getting into farming was a way of taking action to build a better future amid concerns about climate change.

Regional board member and Fraser Valley, B.C. organic vegetable farmer Ari Westhaver
said the Agricultural Land Reserve, a provincial designation in B.C. which designates agriculture as the primary use of 4.6 million hectares of land has not done enough to prevent the loss of farmland.

“It’s not preventing investors from buying up farmland,” Westhaver said. “So, while physically it protects farmland from being lost, it does not prevent loss of farmland from farmers into the hands of investors.

“The reason I’m here today as a young farmer is that we’re currently in the midst of a transition crisis, we’re seeing a generational shift where 40 per cent of farmers in … Canada are planning to retire in the next few years, but nobody has a transition plan,” he said.

“The only plan that they have, as deeply indebted farmers is to sell their land for a profit, and the reason they’re able to do so is farmland has been kind of divorced from its productive value, and it’s now something people speculate on.”

The NFU published an open letter ahead of the demonstration outlining its concerns.

“Farmers have the right to determine how their food is produced and need equitable access to productive resources,” the letter read. “Young farmers are up for the challenge. But land speculators and multinational investors are snatching up Canada’s farmland, and with it, our future.”

— Jonah Grignon reports for Glacier FarmMedia from Ottawa.

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David Derwin of PI Financial in Winnipeg spoke of when canola prices were falling, and they broke through that psychological barrier of $800 per tonne on their way down.

“That was the key area of support. That would be a natural place for these prices to migrate back to,” Derwin said, pointing at old- and new-crop contracts.

“That would be a magnet to pull prices back up to those levels,” he added.

The current upswing in canola has largely been due to speculative funds looking to get out of enormous short positions they’ve built. Added to that, Derwin said there have been other factors influencing gains in the Canadian oilseed.

“We are entering what sometimes is a bit of a seasonally upward movement, he explained, noting this could last through April to June. Also, there’s been support from gains in the Chicago soy complex, European rapeseed and Malaysian palm oil.

“There’s room for these [canola] markets to move another $50 per tonne,” Derwin suggested.

He cautioned the overall trend is still to drift lower, but with fluctuations going up and down.

That said, he added, this is a good time for farmers to take advantage of canola prices and not to be complacent — and that farmers should add additional hedges and make more new-crop physical sales.

“The bottom line of it, is the risk is always to the downside for the farmers,” Derwin said.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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“This has been a brutal drop in canola,” said Bruce Burnett, director of markets and weather with MarketsFarm.

“We have a lot of money playing around in canola right now,” he added, noting much of the latest weakness was tied to speculators adding to short positions.

The latest Commitment of Traders data, as of Feb. 28, showed fund traders already heavily short at that time, with open interest rising to record levels over the past two weeks as canola futures lost roughly $75 per tonne.

“The funds are looking for things they think are overvalued, and they’ve determined that canola is overvalued,” Burnett said.

However, he noted, canola futures are now trading at a discount to Chicago soybeans, which would imply canola should be due for a correction as the Canadian oilseed typically trades at a premium.

From a chart standpoint, the May contract fell below several key support points during the latest selloff with the relative strength index showing a heavily oversold market.

— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.

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Lawmakers debated whether to change Section 25 of the constitution to enable authorities to seize land to address racial land inequalities left over from colonialism and white minority rule.

Redressing them has been a flagship promise of the ruling African National Congress (ANC) but little progress has been made on it nearly three decades since the end of apartheid.

“Today we stand to complete the fight against the original sin of land dispossession,” the amendment’s main champion, Justice Minister Roland Lamola, said in a speech in parliament.

He said the state was targeting land only under special conditions such as it having longtime informal occupants, being unused and held purely for speculation, or being abandoned.

But it was rejected by the ANC’s opponents on both sides of the spectrum. The main opposition Democratic Alliance (DA) and right-wing Freedom Front Plus view the plan as an assault on property rights, while the radical Marxist EFF — which also voted against — wants the state to take control of the land.

In all, 204 lawmakers backed the amendment and 145 voted against, with no abstentions.

In the early 20th century, South Africa’s British imperial rulers gave the lion’s share of farmland to whites, mostly to the Afrikaners, descendants of generations of Dutch settlers who make up most white farmers today.

They left just seven per cent for “natives,” meaning Blacks, aboriginal Khoisan and “coloureds” — Afrikaans-speaking South Africans of mixed multiracial heritage.

Then in 1950, the Afrikaner National Party passed a law limiting movements of non-whites, kicking 3.5 million Blacks off their ancestral homelands and putting them in townships.

Twenty seven years of Black majority rule has barely shifted this apartheid geography, despite Nelson Mandela’s pledge after taking power in 1994 to return 30 per cent of land in five years.

“This bill…does nothing to help landless South Africans who have been let down by the ANC’s failing land reform,” the DA’s land committee chairperson Annelie Lotriet said.

Nearly 26 million hectares — three quarters — of privately-owned land is still in the hands of whites, who make up less than a 10th of the population of 58 million, while only four per cent is owned by Blacks who are nearly 80 per cent, government data shows.

The government has tried to persuade whites to sell their land under a ‘willing buyer, willing seller’ policy, but found hardly any willing sellers. A 2016 parliamentary study found the programme had transferred just 5.46 per cent of farmland to Black individuals, trusts and state institutions in two decades.

— Tim Cocks is a Reuters correspondent for southern Africa in Johannesburg.

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Short interest in cannabis stocks, which reflects bets that prices will fall, has risen 55 per cent for the year to date, handing short-focused investors more than $2 billion in profits over the period, according to data released by research firm S3 Partners on Monday (all figures US$).

More than 800 cases of a vaping-related lung disease and 12 deaths across 10 U.S. states have so far been reported by the U.S. Centers for Disease Control and Prevention, leading states such as Massachusetts to impose temporary bans on all vaping products. Those numbers are expected to climb.

A pushback on vaping could put further pressure on companies such as Massachusetts-based Curaleaf Holdings and Edmonton-based Aurora Cannabis, whose stocks suffered drops of 10 per cent or more after missing revenue projections in their most recent quarters.

Fund managers say increased short selling is a sign that the industry is transitioning from a can’t-lose proposition to a shakeout that will leave only the highest-quality companies standing.

“We’ve been through the golden ages in the sector where you had high growth models and unsustainable price speculation because it was a hot new idea,” said Michael Underhill, chief investment officer at Capital Innovations, who has focused on cannabis stocks. “Now the gold rush talk is gone and you’re going to see a rationalization of the business.”

As a result, Underhill is focusing more on companies like iAnthus Capital Holdings, which recently hired senior executives from Coca-Cola, Nike and Hewlett-Packard, and is focused more on managing its balance sheet for long-term growth than expanding at any cost, he said. Shares of the company are down 65 per cent for the year to date.

“This is going to start being a story of haves and have-nots very soon,” he said.

Short-selling will likely continue to weigh on share prices until legislation allows more giant fund companies such as Fidelity Investments and T. Rowe Price to take larger positions in cannabis companies, said Brett Hundley, an analyst at Seaport Global.

“It’s going to be a while before big institutional investors can access the cannabis space and that takes away the incremental buyer that could push stock values up,” he said.

That lack of support from capital markets will also weigh on companies trying to expand in newly opened markets such as Illinois and Massachusetts, making it harder for those with weak balance sheets to survive, he said.

Yet some fund managers maintain that the short-selling is already overdone, with the possible health benefits of cannabis boosting its long-term appeal.

“There’s a little bit of a feeding frenzy happening right now and everything good is getting thrown out along with the bad,” said Dan Ahrens, portfolio manager of the actively managed AdvisorShares Pure Cannabis ETF.

— David Randall is a Reuters reporter in New York City.

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Green Party leader Andrew Weaver on Thursday introduced the Property Law Amendment Act as a private member’s bill, which he said “would prohibit foreign entities from purchasing ALR land over five acres.”

The new bill is a reintroduction of a bill which Weaver proposed, and which died after first reading, in February last year. With three MLAs, the Greens are now supporting an NDP government tied with the opposition Liberals at 41 seats.

“One of the key reasons why young people are unable to pursue farming is due to the cost of land,” Weaver said in a release. “By allowing ALR land to be subject to international real estate speculation, we are limiting their opportunities to get into this vital, sustainable industry.”

Furthermore, he said, the province today imports about 70 per cent of its vegetables from the U.S., particularly from California, and “with these regions increasingly experiencing extreme weather events such as droughts and floods, it is more important than ever that B.C. take the future of our food security seriously.”

Alberta, Manitoba, Saskatchewan, Quebec and Prince Edward Island have set up similar laws to protect agricultural land, leaving B.C. as “the only western province without such a law,” he added.

In Alberta, a foreign entity can’t own or control more than two parcels of more than 20 acres in total, while in Saskatchewan, non-Canadian citizens can own no more than 10 acres. Manitoba’s rule limits foreign interest at 40 acres.

In B.C., meanwhile, Vancouver commercial real estate newspaper Western Investor on Thursday quoted Weaver as saying foreign buyers have been looking elsewhere, including farms, for investment properties since the previous Liberal government set up a tax on foreign investment in Metro Vancouver property last year.

The paper cited a survey last year, conducted by credit union Vancity, which showed farmland in B.C.’s Lower Mainland running for between $150,000 and $350,000 per acre on parcels of less than five acres.

The same survey showed Metro Vancouver farmland running around $110,000-$120,000 per acre for farms around 20 acres, and $50,000-$80,000 per acre for parcels over 40 acres. It also showed almost a third of actively farmed Metro Vancouver ALR farmland is leased by farmers from non-farmer landowners.

While ALR land’s usage is limited to farming, each property is entitled to a single-family dwelling and owners can apply for exemptions to building and land-use restrictions, Western Investor noted, citing an application submitted in 2016 in Richmond to build a nearly 40,000-square-foot house.

Weaver told the newspaper his bill’s restrictions wouldn’t apply to anyone who pays taxes in Canada.

“We want to encourage people to come live here, work here, pay taxes here. What we don’t want is third-party, offshore interests using our land, our homes, as tools for speculative investment,” he said. — AGCanada.com Network

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The “No Speculation with Food” initiative is subject of a binding referendum on Feb. 28 under Switzerland’s system of direct democracy.

Proponents argue that speculative transactions create volatility and lead to hunger and poverty. They point to a study by the Federal Institute of Technology in Zurich that speculation can account for 60 to 70 per cent of price movements, making it harder for poor countries to afford food.

The measure would amend the constitution to ban banks, trading houses, insurers and other investors and wealth managers in Switzerland from dealing for themselves or for clients in financial instruments based on agricultural commodities or food.

The government noted that no trading platforms for such products exist in Switzerland and that companies could easily circumvent a ban limited only to this country.

Banning such trades would harm the economy, it added, noting the costs it would impose on the many Swiss-based trading companies, insurers, banks and pension funds that deal in farm product derivatives.

It would also impinge on economic liberties and raise questions about Swiss policies at a time the economy was also labouring under the impact of a strong currency, it added.

— Reporting for Reuters by Michael Shields in Zurich.

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Until recently, the academic and policy debate about futures price formation has been locked in an acrimonious and polarized standoff between market fundamentalists, who insist all price moves reflect supply-and-demand fundamentals, and those writers who blame speculators for every rise in food and fuel prices.

Anti-poverty campaigners focus on the role of speculation because they want governments to impose more controls on the cost of food and fuel. Free-market economists stress the role of fundamentals to deny governments any ammunition to meddle.

Both positions are extreme and unconvincing.

Now Xiaoli Etienne, Scott Irwin and Philip Garcia have published an innovative paper examining the evidence for temporary price bubbles in markets where prices are otherwise driven by fundamental factors.

According to the authors, futures prices for grains, livestock and soft commodities like sugar have all exhibited multiple bubbles over the last four decades, with bubbles more common in the 1970s and again in the 2000s than during the 1980s and 1990s.

Bubbles pre-date the rising popularity of indexing strategies and the “financialization” of commodity markets. There is no evidence bubbles have become more frequent or larger following the entry of more financial investors into commodity futures markets since 2005.

“Bubbles existed long before commodity index traders arrived and the process of commodity market financialization started,” according to a paper on “Bubbles in Food Commodity Markets: Four Decades of Evidence” presented at an IMF seminar in Washington on March 21.

In fact most of the biggest and long-lasting bubbles occurred in 1971-76. Financialization may have ensured bubble-like price movements are now smaller and reverse more quickly.

“Compared to the post-2000 years, speculators and irrational traders (may have) played a greater role influencing prices in the 1970s because markets were less actively traded. The arrival of new traders in recent years, coupled with a dramatic increase in trading volumes, has increased market liquidity, apparently reducing the frequency of bubbles,” the authors write.

The authors speculate bubbles may be driven by herding behaviour, momentum trading or other “noise traders.”

“One possible explanation may be that markets are sometimes driven by herd behaviour unrelated to economic realities… As markets overreact to new information, commodity prices may thus show excess volatility and become explosive.

“It may also be that there are many positive feedback traders in the market who buy more when the price shows an upward trend and sell in the opposite situation. When there are too many feedback traders for the markets to absorb, speculative bubbles can occur in which expectations of higher future prices support high current prices.

“It may be fads, herding behaviour, feedback trading, or other noise traders that have long plagued futures markets were highly influential in recent price behaviour. Recent empirical evidence does suggest that herding behaviour exists in futures markets among hedge funds and floor participants.”

The paper concludes with an appeal for more research to identify the source of bubble-like price behaviour.

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Natural gas saw close to $2 billion worth of new net long contracts by the so-called money managers during the week to March 12, according to Reuters’ calculations of the data released by the Commodity Futures Trading Commission (CFTC).

Corn had almost $1 billion in fresh inflow, the CFTC’s weekly report on commodity trader positions showed. The report is compiled at the close of each Tuesday and issued on Fridays.

The broadly optimistic mood among hedge funds and speculators during the week to March 12 raised the net long managed money across 22 commodity markets to more than $59 billion from around $54 billion at the close of March 5.

The rise of about $5 billion was the first in five weeks, and came after the net long money had fallen to a 15-month low, Reuters’ records of the CFTC reports showed.

Nearly $30 billion in net managed long money was wiped out over the past month as hedge funds and other non-commercial investors cut their commodity holdings on fear about the global economic recovery. Some of that money went into equities as the key Dow index for U.S. stocks hit record highs.

The net long managed money in corn rose by nearly $920 million.

The key second-month corn contract on the Chicago Board of Trade rallied in four of the five sessions during the week to March 12, reaching a near five-week high of $7.17-3/4 a bushel.

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“We are suspending subscriptions,” a spokeswoman for BNP said of its Parvest World Agriculture fund, explaining the move as part of the bank’s policy on corporate and social responsibility.

The fund is the bank’s most exposed to food commodities, she said.

Banks around the world have come under fire for speculating on grain and other agriculture products, which critics say has pushed up food prices and fuelled unrest in some poor countries.

BNP also intends to close its Easy ETF Ultra Light Energy fund, which had 43 million euros in assets by end-January, of which 37 per cent was linked to food commodities, the spokeswoman said.

Food commodities amounted to 411 million euros, or 0.08 per cent of the total in assets BNP Paribas manages, it said.

BNP said the move was taken after regular meetings with non-profit group Oxfam, which released a report on Feb. 12 blaming banks for “speculating on hunger.”

Oxfam called for more banks to close food-related funds.

“Banks have a decisive role to play in the fight against food price volatility, which jeopardizes the right to food for hundreds of millions of people in the southern part of the world,” Oxfam France said.

Barclays said Feb. 12 it was halting trading in agricultural markets with hedge funds in a move to burnish its reputation amid a major overhaul.

Last month, Deutsche Bank said it would keep dealing in financial derivatives as it had found little empirical evidence that financial instruments lead to increases or greater volatility in food prices.

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