Farming has played a crucial role in the Canadian Prairies’ history, culture, and identity for generations.
Since the 19th century, many people in Saskatchewan and Manitoba have relied on farming as a way of life.
People’s connection to the land goes beyond financial gain. It defines who they are.
Although I grew up in Regina, I remember spending holidays on my uncles’ farms near Southey and Grand Coulee.
For many of us living on the Prairies, the family farm is integral to our heritage, but it is becoming a thing of the past as farmland becomes an investment commodity.
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Investors drive up the cost of farmland
In Saskatchewan, investor ownership of farmland has skyrocketed from almost nothing in 2002 to nearly one million acres by 2018, equivalent to 18 times the size of Saskatoon.
Despite efforts by the Saskatchewan government to curb farmland ownership in 2016, these investors continue to buy land, driving up prices and making it difficult for young or new farmers to purchase land.
Interestingly, farming prices remained stagnant for a decade but have recently surged 300 to 500 per cent.
The price surge in Saskatchewan is because, back in 2003, the provincial government, under Lorne Calvert, changed the rules about who could own land.
- Previously, individuals were required to reside in Saskatchewan to be able to buy land within the province. However, this changed so that any Canadian or a Canadian company could purchase land, provided it wasn’t publicly traded.
How prices have increased over the last 20 years in Saskatchewan and Manitoba
In the years since these rules were amended, there has been a significant increase in the acquisition of farmland by investor groups and affluent individuals.
Here are some pricing trends over time by region:
• 1997 – $417 per acre
• 2007 – $465 per acre
• 2017 – $1,891 per acre
• 2021 – $2,300 per acre
• 1997 – $289 per acre
• 2007 – $325 per acre
• 2017 – $1,321 per acre
• 2021 – $1,900 per acre
• 1997 – $434 per acre
• 2007 – $628 per acre
• 2017 – $2,540 per acre
• 2021 – $3,100 per acre
• 1997 – $678 per acre
• 2007 – $1,021 per acre
• 2017 – $4,770 per acre
• 2021 – $5,000 per acre
The yields are higher in Eastern Manitoba, so they cost the most.
If you want to compare prices across the country, the Historic Farmland Values Report from Farm Credit Canada can be found here.
More money, more land
The ability to buy more acres is linked to the land and capital a farmer already possesses.
Those who have a lot of land can leverage their existing assets to secure more financing to buy even more acres, leaving new, young, small and medium-scale farmers at a disadvantage as they don’t have the deep pockets that large companies have, which can push them out of the industry altogether.
Who are some of the more prominent players?
There is Robert Andjelic, an investor originally from Manitoba who is now one of Canada’s biggest landowners.
- He’s bought up over 225,000 acres across 92 rural municipalities in Saskatchewan and has made them more farmable by removing trees, brush, and wetlands.
- His company currently has dozens of farmers leasing his farmland.
Another company, Avenue Living, has a portfolio of some 83,000 acres, both in urban real estate and farmland.
Investors argue they provide young or new farmers with access to land through rental agreements.
The Prairies have seen an increase in out-of-province landlords, with Saskatchewan having the highest rate.
According to an article in the journal Canadian Food Studies:
- About 18 per cent of Saskatchewan’s rental agreements are with out-of-province landlords.
- Manitoba is way lower at 7.6 per cent.
- Alberta has 4.5 per cent of out-of-province landlords.
- The number of rental contracts with landlords living outside Canada was low overall but higher in Manitoba at 4.8 per cent.
- Saskatchewan renters have an average of 1,383 acres.
- Alberta renters average 1,250 acres.
- Manitoba renters average 882 acres.
About 65 per cent of renters had three or fewer landlords across the three provinces.
The average rental rate per acre was:
- $50 in Saskatchewan
- $65 in Alberta,
- and $76 in Manitoba.
Regarding crop share contracts, landlords in Alberta and Manitoba received about one-third of the crop, while those in Saskatchewan received one-quarter.
Who are the landlords anyway?
Retired farmers make up the majority (38 per cent) of landlords, followed by spouses or relatives of deceased or retired farmers (20 per cent) and non-farmer individual investors (11 per cent).
Investment corporations represented only 2.2 per cent of landlords overall; however, in Saskatchewan, corporate landlords account for 3.8 per cent.
Individual investors and investment corporations combined made up 13 per cent of landlords.
As land becomes more expensive and harder to come by, smaller farms are combining with larger ones, making it even more difficult for other small and medium-sized farms and new and young farmers to get started or expand.
According to research by Hannah J. Bihun at the University of Manitoba, older farmers believe that their children will need to continue expanding the farm to remain profitable, pushing them to make speculative land purchases that may compromise the profitability and future viability of their farms.
Taking on immense debt loads to expand operations does not account for the fact that farmers rely on the productive capacity of farmland, which is weather dependent, to generate income. In a particularly bad year, they may struggle to pay what they owe.
If you’re a landlord, the productive value of the land is something you don’t have to worry about since your income comes from collecting rent.
Until I started researching this issue, I had never thought of farmland as a financial investment. If you have a mind for that sort of thing, one could generate wealth through economic activities such as capital gains, derivatives, and dividends on top of collecting rent.
A trend has started to emerge where people buy “second farms” or “satellite operations” in other areas. In part, as the price list above shows, land may be cheaper in other regions, but also because land can be hard to come by close to home.
Alberta farmers are interested in expanding into Saskatchewan
In 2019, real estate agent Ted Cawkwell told the Saskatoon StarPhoenix he received many calls from Alberta farmers wanting to buy land in Saskatchewan.
Either family members would move to Saskatchewan to work the new operation, or a farm manager would be hired.
Remember Andjelic, who is now one of Canada’s biggest landowners? His company promotes renting satellite operations as a way for farmers to reduce risks associated with weather conditions. One part of a province may receive hail while the sky is blue and sunny miles away.
- In 2021, Andjelic Land Inc. offered rental packages ranging from 5,000 to 6,000 acres and one package of 21,000 acres.
Monette Farms is an example of a farming operation that has expanded by renting and purchasing additional farm sites.
- In 2018, Monette Farms was registered as owning 62,808 acres of farmland across Saskatchewan, according to research by Melissa Davidson from the University of Manitoba, who looked into corporate holdings.
- Monette has its headquarters near Swift Current with six other operations around Saskatchewan, one in Manitoba, another in B.C., and two farms in Montana and one in Arizona.
Struggling to remain viable
Farmland consolidation is essential for staying competitive, but smaller operations and new farmers need help acquiring enough farmland to keep their businesses financially viable.
Many farm families are being forced off their land in Saskatchewan and Manitoba.
- Over the last 35 years, almost half of the farms in Saskatchewan and Manitoba have disappeared—mostly smaller farms with sales under $100,000.
- Nearly one-third of Canadian farm families have left their land in just one generation.
- Those who stayed rely on other jobs off the farm to make ends meet, which means their operations are not solely based on farm economics.
- There are fewer than 193,000 farms in Canada, down from 280,000 farms 30 years ago.
Mid-size farms are the most vulnerable
Many mid-size farms, with $250,000 to $1 million in sales, need help in business because of a lack of succession planning or the inability to invest in new farm equipment.
If these farms start to disappear, there may be only 100,000 farms in Canada by 2050, according to a report from the National Farmers Union.
- This means our population is becoming more concentrated in urban areas.
- In Saskatchewan, only 35 per cent of the population lives in rural areas.
Losing family farms hurts small towns
Fewer family farms can impact the nearby towns.
- School populations may shrink.
- Hospitals and businesses may close, including restaurants hosting “coffee row,” where seniors and farmers catch up.
Meanwhile, near cities, like Saskatoon and Regina, the farmland has been converted into acreages where non-farmers commute to work.
Four generations of my extended family grew up in Grand Coulee, but the once tight-knit community where everyone knew everyone is now a town full of strangers.
The removal of shelterbelts in the name of efficiency
As farmland consolidation continues across the prairies, the removal of shelterbelts has become a concern.
These lines of trees and shrubs were initially planted to protect soil from wind and erosion, but they also play a crucial role in offsetting agricultural carbon emissions.
- The Prairie Shelterbelt Program, which ran from 1925 to 2013, provided millions of shelterbelt trees to farmers free of charge.
With the rise of crop production methods like no-tilling, the perception of shelterbelts has shifted.
Some farmers, including Saskatchewan’s largest landowner, Andjelic Land Inc., now view them as obstacles that hinder production.
“We can’t create land, but we can increase productive acres on existing holdings. We choose parcels on which we can perform improvements that enable the operators to maneuver big machinery,” reads Andjelic’s website.
They believe removing shelterbelts is more efficient because it allows the equipment to pass over several quarter sections of land before making a turn.
- Between 2008 and 2016, over 2,491 km of planted shelterbelts were removed across Saskatchewan.
Andjelic Land does own 40,000 acres of green land across Saskatchewan that isn’t cultivated and is made up of pasture lands, native grass, wetlands, and trees. Andjelic Land intends to keep these spaces natural to help preserve wildlife species and their habitats.
Trees can be a part of a community’s identity
One Saskatchewan community, Conquest, is known for its abundant caragana shelterbelts.
These rows of trees were lovingly planted and tended to by generations of residents and have come to represent an essential part of the community’s identity and history.
Many long-time community members were upset when some large-scale farmers removed many of these trees from their farmland.
As more farmers retire, mega-farms could get bigger
In the coming years, as farmers across the Prairies get older and retire, a significant shift in land ownership is expected to take place that will have substantial implications for the future of our agricultural landscape if this land is further consolidated into mega-farms.
One potential solution could be for the provinces to raise taxes to discourage the concentration of ownership. Alternatively, a cap could be created to control how much one person or company could own.
In the short term, there isn’t any interest from the provincial governments in changing the rules.
“If the government puts a policy in that says ‘no, you can’t sell it to him because he’s hit his cap,’ and you have to sell it to someone else, you know what you’ve done? You’ve controlled the wholesale of land,” David Marit, Saskatchewan’s agricultural minister, told the CBC late last year.
Farms of all sizes are needed for a healthy agriculture industry
According to a policy paper published by Agri-Food Economic Systems, mega farms are essential for making sure Canada’s food supply chains can compete with other countries. Still, small farms are necessary because they keep rural communities alive.
- The report warns that the accelerating trend towards larger farms may threaten to cannibalize itself and threaten Canada’s agri-food competitiveness.
- Eventually, there might be insufficient demand for everything they produce, which could hurt everyone in the industry because larger farms would stop investing in new farming equipment and other supplies.
The report recommends the government create policies supporting a diverse range of farms—small, medium and large to keep the agricultural sector and rural communities healthy.
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