Strong interest in Sask. farmland | Locals concerned about outside investors, foreign connections
Saskatchewan farmland continues to be viewed as fertile ground for corporate investors to sink their money.
But as the amount of investor-owned farmland grows, so do concerns about foreign ownership and loopholes in the province’s farmland ownership regulations.
Mark Folk, general manager of the Saskatchewan Farmland Security Board, said concerns about foreign ownership are becoming more common.
But so far, nothing suggests that foreign investors are acquiring title to significant amounts of Saskatchewan farmland.
Nor is there evidence to suggest that Canadian buyers are purchasing land on behalf of offshore investors.
“We’ve heard lots of comments from around the province of foreign money coming in,” said Folk.
“We follow up with every land transaction … we verify the owners of the land … and we verify that they are Canadian citizens.”
Saskatchewan farmland is generating significant interest from Canadian buyers outside of the province, Folk said.
Among those buyers are Chinese-Canadian entrepreneurs, many with significant capital assets and business connections overseas.
“We have seen lots of purchases from people living in B.C., people living in Toronto, people living in different provinces and we’ve seen lots of purchases made by permanent residents or Canadian citizens that have immigrated from a number of different places, including China,” he said.
The influx of investors has brought changes to the province’s land ownership patterns.
Farmers are no longer the only people interested in acquiring farmland.
And with recent changes to grain marketing laws, more investors are now creating vertically integrated businesses that secure investment capital, buy farmland, sign production contracts with farmers and export commodities directly to buyers in China, India and other overseas markets.
Near Ogema, Sask., about 120 kilometres south of Regina, investment in farmland has been brisk.
In the last few years, well-heeled buyers with overseas connections have been scooping up land at two or three times the assessed value.
In many cases, the new buyers come from Calgary, Vancouver, Toronto or other parts of Canada. They have deep pockets but little or no farming experience.
Ryan McKerricher, a local farmer and councillor with the Rural Municipality of Key West, said many local residents aren’t sure what to make of the recent buying frenzy.
“There’s been a pile of land bought around here, that’s for sure,” he said.
“Everybody just says it’s investors buying it … but that’s what scares people most is that you can’t put a face to them.”
According to McKerricher, farmland that was selling for $60,000 a couple of years ago is now selling with minimal effort for $100,000 or more.
“If you’re ready to retire and get out of farming, it’s a good thing … because there’s a buyer waiting,” he said.
“All you’ve got to do is make a phone call and you know you’re going to be well paid. But if you’re just starting out and trying to buy land, it’s a tough go because … it’s being bought up so fast and it’s (overpriced)…”
Richard Linton, a farmer who lives at nearby Pangman, Sask., said some of the most active buyers in the area are Chinese-Canadian investors who reside in Canada and have Canadian citizenship or permanent resident status.
Linton manages land for several landowners, including a Chinese-Canadian businessperson who recently bought 27 quarter sections in the area.
“We actually farm for him and we farm (for) another Chinese operator, and we farm for (Canadian corporation) MaxCrop, plus we farm for some guys … (with connections in) India,” he said.
Linton said he thinks investors are acquiring the land lawfully and are not circumventing farmland ownership regulations.
Last week, he was scheduled to meet with another Chinese-Canadian investor who is interested in buying significant quantities of farmland around Ogema.
“A lot of these guys are not interested in buying a quarter or two. They want to buy a large operation and as far as I know, their objective is to farm the land themselves,” he said.
One of the larger buyers in the Ogema area is MaxCrop, a Canadian corporation with offices in Regina and Vancouver.
MaxCrop, run by Chinese-Canadian businessperson Andy Hu, consists of three separate companies including a real estate operation that buys farmland, a land management company that manages land for absentee investors and a farming operation involved in primary production, processing and value-added exporting.
MaxCrop’s real estate company buys farmland and offers it to individual investors who qualify under Saskatchewan’s farmland ownership laws, said Jason Dearborn, MaxCrop’s chief agricultural operations officer.
He said the corporation has bought about 70,000 acres of farmland in Saskatchewan since it was established about 24 months ago.
It now has significant land holdings in four different parts of the province.
Dearborn said the corporation leases about 90 percent of its land back to local farmers.
It also operates its own farm in east-central Saskatchewan near Sheho, Sask., and has plans to process crops and export them to foreign buyers.
He said MaxCrop is mindful of laws that regulate farmland ownership.
“Within the philosophy of (MaxCrop’s) group of companies, there are a couple of things that we’re very committed to and one is Canadian ownership of farmland,” he said.
“All of our individual investors are either Canadians or landed immigrants.”
Dearborn said Saskatchewan farmland represents an outstanding investment opportunity because it is inexpensive relative to land in other jurisdictions.
In addition, Saskatchewan’s farmers are aging and many will be looking at selling their land within the next decade or so.
Ogema mayor Wayne Myren said opinions among local landowners vary.
Some are concerned about the influx of outside money and the proliferation of investor-funded corporate farms. Others welcome a chance to sell land at high prices.
“Some view it as good, some view it as bad,” said Myren.
“There’s been a lot of land bought up in the area and there’s a lot more that’s going to come up for sale here in the next few years.
“As far as whether it’s a good thing or not, I really don’t know how to answer that. At least the land is getting farmed and at least the (new owners) are using locals to farm it,” he added.
Saskatchewan farmland ownership laws state that land can be purchased by Canadian citizens, permanent residents or 100 percent Canadian owned companies that are not publicly traded.
Investors that don’t meet those criteria are limited to buying 10 acres or less, although they may acquire more land if they obtain an exemption from the Saskatchewan Farmland Security Board.
Folk said Canadian investors who buy Saskatchewan farmland are not required to disclose details about their financing arrangements or the source of their investment capital.
Because of concerns over foreign ownership, the board has recently asked a handful of investors to sign declarations stating that they are the sole owners of the land.
“What we check is who is on title to the property, who is the owner,” Folk said.
“The legislation does not restrict who can provide the owner with financing so if there’s an investor who lives in B.C. that wants to get (offshore) financing … there’s nothing in the legislation that would restrict that.
“Some of the people that we deal with have significant wealth behind them and it’s often a situation where they’re coming into the country, becoming a permanent resident of Canada and coming over with a fairly sizable amount of money and they’re looking to invest,” he added.
“It would appear that Saskatchewan (farmland) is a hot commodity … these days.”