Manitoba farmers will be able to use a new program to pass their farms
to their children and still feel they have secure retirement funds,
says Manitoba agriculture minister Rosann Wowchuk.
This and other new programs should help get young farmers over the
hurdles that block their startup.
“It’s very expensive right now (to take over a retiring farmer’s
operation). We’re looking for a way to help with that,” said Wowchuk
during Manitoba Ag Days.
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“It’s not going to save every farm, but this is going to facilitate and
be another option to help with the transfer of land from one generation
to the next.”
Wowchuk announced a set of five programs called the Bridging
Generations Initiative that are designed to help young farmers start up
and old farmers get out. They include:
- Guaranteeing mortgage loans between a retiring farmer and a young
farmer.
The Manitoba Agricultural Credit Corp. will administer mortgages made
between the young and retiring farmer, taking money from one and
guaranteeing payment to the other.
This would allow a retiring farmer to offer a young farmer a lower
interest rate than a bank would offer but guarantee that both the
payments and the land would be protected. The property mortgage would
be held by the retiring farmer. The maximum amount of the mortgage
would be $250,000.
- Direct loans of up to $400,000 to a starting farmer. The government
would forgive $2,500 of the loan per year for five years if the young
farmer took approved farm management courses.
- Livestock herd establishment loans of up to $200,000 to purchase
breeding stock or supply management quota.
- Lifestyle transition loans to help finance the switch from the farm
to retired life.
- Land lease guarantees for starting farmers.
The programs will be available April 1.
Wowchuk said these programs are needed because 30 percent of Manitoba
farmers are over the age of 55, while 17 percent are under 35.
Thousands will soon retire and thousands are trying to break in.
The mortgage guarantee program helps both groups.
“Retiring farmers can look forward to a guaranteed monthly income
without putting too much pressure on the new farmer,” said Wowchuk.
Don Dewar, president of Keystone Agricultural Producers, said there
aren’t enough details available for farmers to know whether these
programs will truly address the problems of family succession.
But he was encouraged by what Wowchuk said.
“It looks like a real, solid attempt to do something,” said Dewar.
“When you look at the whole package, it’s a step in the right
direction.”
The mortgage guarantee between a retiring farmer and a young farmer
will probably be the most important part of the package, Dewar said.
“I can really see that that one is going to be used,” he said.
Progressive Conservative agriculture critic Jack Penner said the
Bridging Generations Initiative doesn’t do what it claims.
“I’m appalled at this program,” said Penner, who believes that these
programs will not help young farmers enter the business.
“I’m appalled that the minister would try to deceive the people of
Manitoba into believing that this will help young farmers.”
He referred to the mortgage guarantee program as the “bridging of the
senior farmers into town loan,” because it will help retiring farmers
sell their land, but won’t give enough to young farmers to start a
viable farm.
He said a farm now must be at least 800 to 1,000 acres, and that would
cost about $2 million, or eight times what the mortgage guarantee
program offers.
He said the Manitoba and federal governments should get together to
offer farmers grain subsidy payments equal to those received by
American farmers.
“Then young farmers could make money and get loans and buy land,” said
Penner.
“In a round about way this sets up a process for the province of
Manitoba to get into the land bank business again.”
Wowchuk said easing the transfer of land between the retiring
generation and young farmers will ensure that agriculture renews itself.
“Despite the challenges that our industry is facing I am optimistic
that there is a future in agriculture and we will see a growing
industry in this province,” said Wowchuk.
