Saskatchewan agriculture minister Bob Bjornerud says he needs more information before he can consider allowing cattle producers to use crown lease land for lender security.
The topic was debated at the recent Saskatchewan Stock Growers Association semi-annual meeting, although a resolution on the matter was tabled until the June convention.
The resolution noted that Alberta producers have an advantage over those in Saskatchewan because they operate under different legislation.
Mark Alford, a McCord rancher who seconded the resolution, said ranches in Alberta are sold and secured with leases.
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If young ranchers in Saskatchewan could do the same thing, it would make it easier for them to enter the business, he said.
Glen Snyder, the Bank of Montreal’s Regina-based agriculture manager, said he liked the idea and has been promoting it.
He used the BSE crisis as an example of where it would have been helpful.
Ranchers with perhaps four quarters of deeded land and 30 quarters of leased land needed recapitalization because of the border closure and non-existent markets.
“We couldn’t help them,” he said.
In Alberta, however, lenders can use the value of lease land as security. Under the province’s Public Lands Act, the sustainable resource development department can enter into an agreement with the lender to use agricultural dispositions as security.
If the leaseholder defaults on a loan, the lease is cancelled and the lender has one year to find a replacement leaseholder.
Associate deputy minister Nithi Govindasamy said Saskatchewan is looking at its policies with respect to land leases.
“The act itself is pretty thin,” he told the meeting. “We need to be modernizing that act.”
An advisory board to the agriculture minister recommended modernizing the act four years ago.
Ross Beierbach, who ranches near Consul, said changing legislation to allow lease lands to be included in ranch valuation would give young people a chance.
“It’s a move into making us a viable province in the future,” he said.
The motion was tabled after another member suggested the idea needed more study.
Bjornerud agreed the change would offer stability but he said he needed more information about what happens to crown-owned land if a borrower falls behind on payments on deeded land.
As it stands, a leaseholder could default on payments to deeded land but still keep the lease.
Meanwhile, the SSGA membership passed a resolution urging more investment in grass and forage research.
Lynn Grant and Pat Hayes, both of Val Marie, were re-elected to serve as representatives to the Canadian Cattlemen’s Association.
