Land prices may be lev­el­ing off

The Glengarry News - Glengarry Supplement - - News -

Af­ter sharp in­creases in farm­land prices over the last few years, a lev­el­ing-off is ex­pected to be in the works this year.

Agri­cul­tural land prices in Stor­mont-Dun­das-Glen­garry ranged from $7,000 tp $17,000 per acre last year, re­flect­ing a province-wide trend.

Ac­cord­ing to Farm Credit Canada cal­cu­la­tions, On­tario farm­land prices jumped 30.1 per cent in 2012 and by 15.9 per cent in 2013.

For 2014, the in­creases were more mod­er­ate, rang­ing from five to 10 per cent. Farm­ers sell $15 bil­lion worth of land each year in Canada. Low in­ter­est rates and higher com­mod­ity prices have fu­eled the spikes in land val­ues. When times are good, pro­duc­ers have money on hand to buy more acreage.

But ris­ing prices have given rise to con­cerns about young farm­ers en­ter­ing the field, es­pe­cially when they would have to spend as much as $1 mil­lion for a de­cent-sized op­er­a­tion.

With the av­er­age age of farm­ers be­ing 60, about 50 per cent of land as­sets will be trans­ferred in the next five years. Of the re­tir­ing farm­ers, 75 per cent of them don't have suc­ces­sors. Or­ga­ni­za­tions, such as the Na­tional Farm­ers’ Union, have been press­ing for more re­stric­tions on for­eign own­er­ship of prop­erty.

The gov­ern­ment has been pressed to en­act leg­is­la­tion wherein farm­land can only be owned by in­di­vid­u­als who re­side in the province in which the land is lo­cated, or by in­cor­po­rated farm­ing oper­a­tions owned by in­di­vid­u­als who re­side in the province.

In Québec, non-res­i­dents must seek au­tho­riza­tion from the Com­mis­sion de pro­tec­tion du ter­ri­toire agri­cole du Québec to ac­quire more than four hectares (or about 10 acres) of farm land.

Due to land price in­creases, a new pro­ducer would have to spend at least $1 mil­lion to get started.

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