Farmland investors in Saskatchewan paid 39 per cent more than competing farmers

Non-farming investors own less than two per cent of Saskatchewan farmland but have paid premium prices to acquire that dirt.

A study partly done by a University of Regina sociology professor indicates payment of premium prices.

In 16 rural municipalities with a concentration of close to 10 per cent investor ownership, “investors paid $882 per acre, 39 per cent more than other arm’s length buyers and 72 per cent more than family-based buyers,” Andre Magnan told the Farming for Profit conference in Moose Jaw. The data used came from the Farmland Security Board which oversees non-farmer land investment and distinguishes between family and non-family transactions. Province-wide data showed investors paid $239 an acre above assessed value or a 50 per cent premium and $94 an acre more than family transactions.

The study was unable to determine if investor land purchases pushed up prices, said Magnan,

But a look at Farm Credit Canada farmland price surveys correlates with investor activity.

Investor share of farmland transactions was about seven per cent in 2011, almost 10 per cent in 2013 and seven per cent in 2013.

The FCC survey registered Saskatchewan farmland price increases of 22.9 per cent, 19.7 per cent and 28.5 per cent in those years respectively.

In 2104 investors owned 837,000 acres of farmland in Saskatchewan with nearly 10 per cent ownership of land in 16 RMs.

Thirteen RMs with high investor concentration are located south of Regina towards Weyburn.

Highest concentrations near Moose Jaw are the RMs of Terrell at Avonlea, and Excel at Viceroy. Smaller concentrations occur southwest of Saskatoon near Conquest, near Tisdale and around Piapot. Most of the investor farmland is owned by 37 owners with the top three owning 380,000 acres.

About 30,000 acres of investors’ farmland was sold between 2012 and 2014.

Magnan wants to widen the scope of the study to see how local land prices were impacted and if the communities were impacted.

The Canada Pension Plan Investment Board owns 115,000 acres of farmland acquired from a land partnership that was designed to hold land for years to benefit from price increases.

That land deal was controversial and saw the province tighten land ownership rules to prohibit pensions plans and some funds from buying farmland.

Ron Walter can be reached at ronjoy@sasktel.net