Canadian farmers are producing more grain than ever and they’re growing it on more land than ever.
However, a larger proportion of what they produce is being grown on land that’s owned by someone else.
That’s especially the case in Western Canada.
“We’re seeing that an increasing proportion of the land being operated by farmers is rented or leased … or crop shared,” said Erik Dorff, an analyst with the Census of Agriculture. “I think there are a number of factors. One is the capital cost for land…. The other thing we know is that there are areas that are rented from people that aren’t part of the agricultural universe. They’re just landlords.”
According to data contained in the 2016 Census of Agriculture, the total area used for agricultural purposes in Canada last year was roughly 159 million acres.
That number includes land used for all types of agricultural activity, from grain and oilseed production to grazing, horticulture, orchards and dairy production.
Of that amount, nearly 45 million acres (28.5 percent) were either rented or leased from other landowners or crop shared.
In 2011, the area leased, rented or crop shared was up 41 million acres.
Land leases and rentals are the most common on the Prairies.
In Saskatchewan alone, the amount of land that is leased, rented or crop shared rose by nearly 2.5 million acres from 2011 to 2016.
The total area in the province that is managed by farmers but not owned by the farmers who manage it now stands at about 19.5 million acres. That compares to 37.8 million acres owned by farm operators themselves.
Todd Lewis, president of the Agricultural Producers Association of Saskatchewan, said rising farmland values are the primary factor behind the decision to lease or rent land, as opposed to buying.
According to Farm Credit Canada, average land values in the province have increased by nearly 18 percent per year since Jan. 1, 2011.
For farmers who own land and are nearing retirement, that’s good news.
But for others who are looking to expand their operations, renting or leasing is often the only option.
“Rising land values are a two-edged sword,” said Lewis.
“For people exiting the industry or those who are well-established, higher land prices are not a terrible thing for your net worth. But it can certainly end up being a barrier to entry for new people getting involved.”
Dorff said young farmers are renting more land than ever, either from neighbouring farmers or from others whose only connection to agriculture is land ownership.
“Certainly, one of the things that we’ve noted is that young farmers are more likely to rent,” Dorff said.
“Those that may not have as much access to capital right up front are using land rentals in order to get in (or get bigger).”
Dorff said the ag census does not keep statistics on the amount of farmland that’s owned by investors or non-farmers.
“We can’t really derive that from what we collect through the census,” he said.
“Certainly, the vast majority of land that farmers have access to is still owned by farmers themselves, but we can’t quantify what proportion of the land that is rented is held by investment-type companies.”
Some leased land is owned by older producers who are scaling down their own operations but aren’t ready to sell the farm, he said.
In other cases, the properties are family homesteads owned by non-farming relatives or investment properties owned by absentee or institutional investors.