Benefits to rural communities | Real estate agent assures agents that investors are Canadian
Justin Yin has a simple message to rural Saskatchewan: don’t worry.
Yin is a Saskatoon real estate agent who came to Canada from China nine years ago. He specializes in selling farmland to Canadian-Chinese investors who want to farm it themselves.
“There is no need to panic,” he told a meeting of the Canadian Association of Farm Advisors in Regina Feb. 21.
“We have no need to be concerned about land safety.”
Rumours have flown since Chinese immigrants began buying land in Saskatchewan a few years ago. Some claim the buyers aren’t actually Canadians, which they must be under the province’s laws, while others suggest they are overpaying for the land and pushing prices out of reach for others.
Yin, who bought his own land in 2008, said Chinese immigrants believe Saskatchewan farmland is undervalued and are willing to pay for an asset they could never have in their homeland. Under Chinese law, all land belongs to the country.
“Everyone has a dream,” he said, and for many Chinese that dream is owning land.
Yin said his clients are all Canadian citizens or permanent residents.
“Many people call me and my first question is, are you Canadian?”
More than 95 percent of his calls come from outside Saskatchewan, mainly from Toronto and Vancouver.More than 70 percent are cash deals.
Yin said this lessens the risk for all involved, reduces debt loads and injects more cash flow into the province. He said his clients see this type of investment as more secure than the stock market.
“More than half of them want to become farmers, especially those with 10 quarters or more,” Yin said.
They need time to learn how to farm, which is why most of them lease their land for at least the first two years.
Some at the meeting questioned how the new owners, who have no agricultural experience and face language and cultural barriers, could possibly learn everything they need to know in such a short period of time.
“This is a problem for my buyers and for myself,” Yin agreed.
That’s where the role of farm advisers comes in, he said. The investors are willing to pay someone to teach them step by step or to work alongside their tenants.
Yin said current residents have to look at the medium to long-term benefits of new investors, including increasing the population in rural areas. Some investors and their families will move to the farms or nearby communities.
“I can’t say that’s good or bad, but it’s fact,” he said.
Many of these new farmers bring experience in business that could result in the development of new products. For example, Yin said some Chinese liquor that isn’t currently available in Canada could be made and sold here.
Among the concerns raised about Chinese farmers is that they would form alliances with companies in China and ship products directly there.
“Why is it wrong to export directly to China when we already export so much?” Yin said.
He also said these new farmers need real estate agents, lawyers, accounting and tax services, agronomic information and employees, all of which can come from revitalized smaller communities.
“The main problem is language,” he said.
While some will hire Chinese-speaking experts, Yin suggested only 30 percent hire Chinese lawyers,.
Shawn Bourgeois of All Canadian Grain Inc., said it would perhaps make more sense for the new entrants to enter into joint ventures with existing farmers who have a lifetime of knowledge to offer.
“Basically, you have venture capital” and a genuine interest in farming, he told Yin.
However, there is far too much to learn in just two years of leasing to a local person and trying to gain an education in farming.
“The end result seems a little difficult,” Bourgeois said.
Another adviser said a change in farmland ownership is not new. A look at a rural municipal map over the years will show the shift from Anglo Saxon to Eastern European to, now, Chinese surnames, he said. The extra liquidity should be welcomed.
As for land prices, Yin predicted that farmland prices will be nearly identical in all three prairie provinces by about 2030 as Saskatchewan land that is now considered undervalued appreciates.