A new report from the Parkland Institute raises alarms about the growth in investment firms that buy farmland. It warns of negative impacts to family farms.
The report, Finance in the Fields, from the research group based out of the University of Alberta, interviewed 52 individuals connected with Alberta’s agricultural sector, primarily farmers but also fieldmen, scholars and land brokers.
The report’s author, Katherine Aske, said the effect of large-scale purchases of agricultural land by investment companies is driving up prices, placing ownership in the hands of money managers disconnected to farming.
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“A majority of farmers are getting priced out of the market entirely,” said Aske.
The report also said owners of large farms are also getting loans to buy more land, anticipating prices will continue to rise and future land sales will fund their retirement. That is adding to land speculation.
“It’s totally warping the market, it’s pushing out farmers, it’s not allowing the next generation of farmers to access land at all,” said Aske.
The exception is renting but Aske added that comes with a different set of issues that will challenge farming sustainability.
“It’s economically precarious, it disconnects farmers from the long-term health of the land and limits their sovereignty.”
It also prevents experimentation in regenerative farming practices, which may provide a more sustainable agricultural land management but doesn’t produce the required return on investment, she added.
“When farmers rent, they are disconnected to the long-term health of the land,” said Aske. “They are unable to produce in different ways that I think are necessary in light of climate change because they have the pressure of this annual rental income they have to deal with and don’t know if they are going to have the land in three years.”
As for the major investor players, the report cites the Canada Pension Plan and Ontario Teachers’ Pension Plan as buying up property of those interviewed. But getting precise data on who is buying what and how much is not easy, and it appears the provincial government is not tracking the trend.
“Saskatchewan is the only province we have these answers about how much land is owned by investors,” said Aske. “The rest of the country, we really have no clue what’s going on.”
Aske said the information in Alberta is available but is expensive to access through the land titles office. She hopes to gain access to the information through further research projects.
The report cites the resignation of farmers, who are strong believers in free-enterprise and less government interference, to the “financialization” of agricultural lands, but Aske said public policy created the situation and can help rectify it.
One example is a requirement for owners of farmland to live in the province.
But collective actions by farmers to protect against financialization, as well as advocacy for fairness will be required, she said.
“Any way we can de-commodify farmland and pull it out of the market system suddenly pulls up endless possibilities because if each generation isn’t having to refinance itself then the future is open,” said Aske.
The full report can be found on the Parkland Institute’s webpage at www.parklandinstitute.ca.
