Fields of dollars: Soaring farmland prices threaten future of farming in Canada
Meredith MacLeod, CTVNews.ca
Published Wednesday, May 16, 2018 12:47PM EDT
The average price of farmland in Canada has more than doubled in the last 10 years, leading to concerns about the future of agriculture in this country as a large group of farmers retires over the next decade.
Farmland prices have increased nationally by 132 per cent since 2007, according to data from Farm Credit Canada (FCC). In 2017, the highest hikes came in Saskatchewan (10.2 per cent), Nova Scotia (9.5 per cent) and Ontario (9.4 per cent).
Based on Statistics Canada data on average price per acre and farm size, the average farm in Canada goes for $2.2 million. In Ontario, that’s $2.6 million and in Saskatchewan it’s $2.1 million.
That makes farm ownership all but impossible for the next generation of farmers, says Mel Luymes, outreach and engagement coordinator for FarmLINK, which she describes as “farm realty site meets online dating.”
“I was thinking about going into farming in 2011 and the headline of the Ontario Farmer was that the first (100-acre) farm had reached $1 million and I thought maybe this is not the right time to get into farming, but in the next five years it just doubled,” she told CTV’s Your Morning Wednesday.
She says young people interested in farming can’t afford to get in and even those inheriting a farm are assuming huge debts from their parents.
When it comes to rapidly rising land costs, there are two factors at play. Strong crop yields, fuelling demand by producers to expand their operations, account for about half of the farmland price hikes, says Luymes. The rest comes from domestic and foreign speculators and developers who are buying up farmland and converting it to commercial and residential uses, including subdivisions and mega-mansion properties.
A Senate committee report recently concluded that farmland prices are threatening the viability of the family farm.
“Economic conditions are conspiring against farmers, who already encounter more adversity than they need," said agriculture committee chair Sen. Diane Griffin in March. "We need the government to help counter the market forces that are stacked against Canadian farmers, which make it harder for them to buy the land they need to run successful farming enterprises.”
The report makes five recommendations, including tax reforms and changes to land use planning.
Luymes, who grew up on a large grain farm in Wellington County, Ont., says government policy could build incentives in for a retiring farmer to sell a property to a young farmer rather than the highest bidder.
According to Food Secure Canada research, 50 per cent of farmland is going to change hands over the next 10 years and 85 per cent of those farmers do not have a son or daughter who is going to take over.
Luymes says FarmLINK matches farm seekers with farmers looking to sell. She said she recently spoke to a woman who spent years building an orchard operation and didn’t want to sell to a developer who would just bulldoze it over. Instead through FarmLINK, she found someone she is mentoring for a year to take over the farm.
Luymes says Canadians also have to shift their expectations at the grocery store.
Consumers demand cheap food, but land prices and other factors make that impossible in Canada, she said.
“We don’t grow cheap food, we grow great food. We’ve got higher labour standards, environmental regulations, and food safety than elsewhere around the world, and we do that with less government support than Europe or the United States, for example.”
But by seeking out cheap food over all else, Canadians are hurting the domestic industry.
“Farmers cannot even be competitive on their own turf in Canada. So now we’re importing food and eroding our ability to feed ourselves.”