Farmland speculation concerns producers

Saskatchewan farmers are worried about land speculators.

A University of Regina survey, conducted last summer, shows that 62.5 percent of Saskatchewan farmers believe outside investors are having a larger influence on land purchases in their part of the province.

That’s a much higher number than farmers in Manitoba or Alberta.

In Manitoba, only 29 percent of survey respondents said non-farmers (such as individual investors and pension funds) have taken an increased interest in buying farmland, over the last 10 years. In Alberta the percentage was 39 percent.

“There’s quite a difference in the three provinces,” said Andre Magnan, University of Regina associate professor of sociology and social studies, who spoke about the survey in early February at the Keystone Agriculture Producers annual meeting in Winnipeg.

Magnan studies the history and marketing of grain on the Prairies and the changing patterns of farm ownership in Canada and Australia. He didn’t speculate on why Saskatchewan farmers are more worried about investors buying farmland. That might come out later, when he dives deeper into the data.

Magnan created the survey because he’s curious about investor involvement in the farmland market and the concentration of farmland in fewer hands.

“And what those (factors) might mean for farmers’ access to land,” he said.

About 400 farmers responded to the survey, with 124 in Alberta, 210 in Saskatchewan and 66 in Manitoba. The average age of respondent was 55.3 and the average farm size was 3,800 acres.

The producers who said investors are taking an increased interest in buying land answered a couple of follow-up questions. Respondents said the investment from outside investors is detrimental to agriculture and their community.

“A large majority of farmers are reporting they believe it’s negative, or very negative,” Magnan said. “I think it’s clear that farmers view this trend with concern.”

Rauri Qually, who farms 25 kilometres west of Winnipeg in Dacotah, Man., is definitely concerned.

At the KAP meeting, he questioned why non-farmers are allowed to buy land in Manitoba.

“It has become very attractive to outside entities buying farmland not to farm it, but to use it as an asset.”

Magnan also asked prairie farmers about their rental agreements:

  • Seventy-five percent of respondents rent land from others.
  • Average amount of rented land was 400 acres.
  • Average length of rental contract was 12 years.

The survey gathered information about the landlords.

As expected, retired farmers were a common landlord, with 38 percent of respondents saying they rented from a retired producer. About 20 percent of the landlords were the spouse or relative of a retired or deceased farmer.

About 11 percent of rental agreements were with non-farmer investors. Most of the non-farmers renting land were individuals, but some were corporate investors.

“The third largest category was … investors,” Magnan said.

Qually opposes investors buying land and renting it because the arrangements are rarely public or transparent.

“(It’s) usually closed bids that young farmers have no chance of bidding on.”

Qually gave the example of an Austrian, with Canadian citizenship, who owns 5,000 acres near Dacotah and rents it to a large producer from Carman, Man.

The investor reportedly bought the land in the 1990s but has never lived in Manitoba.

“Apparently (he) just has an apartment in Toronto.”

Qually doesn’t have a problem with someone from Europe, or anywhere, buying farmland in Manitoba, as long as they move to the province and become farmers.

“I don’t see where it helps the ag industry, as a whole, where we’ve got outside entities coming and buying farmland with no intention of farming it,” he said.

At the Winnipeg meeting, Qually put forward a resolution asking KAP to lobby the provincial government. He wants the province to review and modify the Farmland Ownership Act to ensure “producers’ best interests are preserved.”

The resolution passed with overwhelming support.

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