Ongoing farm consolidation major land ownership issue

One has to be an optimist to see the report by the Senate agriculture committee on farmland ownership as providing the ultimate solution to the protection of farmland and a decline of the number of farms, but so be it. Optimism it is — if the recommendations are heartily embraced and enacted full throttle.

Remembering, of course, that this is a Senate report, whose usual locale is a shelf.

Still, the committee, in its report called A Growing Concern: How to Keep Farmland in the Hands of Canadian Farmers, recognized the trend toward farmland loss, higher land prices — which makes it harder for new farmers to get started — and ownership passing into hands of institutional investors whose motive is investment for profit rather than farming.

Unfortunately the report, which was released last month, barely touched the issue of the growing farm sizes and thus the decline in the number of smaller and mid-sized farms. To be fair, the 2016 Agricultural Census wasn’t out when the committee conducted much of its work, but the trend toward larger farms and fewer farmers was well-known.

For context, it’s worth reiterating the trends found in the 2016 ag census:

  • The age of farmers is increasing. More than half are 55 or older, up seven percent from the 2011 census.
  • There are almost six percent fewer farms.
  • The average farm size is increasing.
  • There are eight percent fewer farmers in the crucial 35 to 54 age category.
  • Only one farm in 12 has a succession plan, which makes it easier to pass along farms to the next generation.

The Senate committee’s report made several recommendations to keep farmland in the hands of Canadians — the most direct one being that the lifetime capital gains exemption of $1 million on farms be increased because it no longer reflects the reality of farm costs.

That would make it easier to pass on farms to the next generation, but it does not address the growth in the size of farms. Farmers can sell to anyone, including other large farm operations.

It does, to some degree, address the issue of profitability, which is the ultimate prize in attracting new farmers. Young people considering farming are turned off by large investments and low profitability.

The 2016 census found that the number of farmers younger than 35 actually increased by eight percent since 2011. That was attributed to increased profitability of farms for a five-year stretch, leaving prospective farmers with room for optimism.

Since farmland is a provincial jurisdiction, the Senate report makes several recommendations about co-operation among jurisdictions for tracking farmland use, which, presumably, may generate new policies at some point in the future.

However, it is not a healthy sector that has fewer and fewer owners who own larger and larger properties.

The report encourages various lenders —Farm Credit Canada, banks, and governments — to continue to provide loans for young farmers. That’s fine, as far as it goes, but these programs do not appear to be enough.

And a recommendation to improve co-operation among various levels of government to create better soil maps in order to assist with land-use planning is welcome, but not life-changing.

The consolidation of farms is an enormously difficult issue that would likely require massive government (or government-encouraged) grant and loan structures and debt forgiveness to attract more young farmers because profitability is the ultimate magnet.

But we’re unlikely to see the enthusiasm for such policies in the near future.

Will the recommendations on land tracking and land use bear fruit quickly enough to generate useful government policy?

Such optimism requires not just optimism, but naivete.

Karen Briere, Bruce Dyck, Barb Glen, Brian MacLeod and Michael Raine collaborate in the writing of Western Producer editorials.

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