Farmland speculation poses risk, Senate finds

Canada has a conundrum: a new generation of farmers want to take over agriculture, but farmland prices are escalating out of their reach, a new Senate committee report has found.

That puts them at risk of becoming employees or tenants of big landowners, and puts Canada’s own food security at risk if governments can’t find ways to curb investment speculation and keep ownership of Canada’s farmland in Canadian hands.

“What struck me personally is that so many young people want to become farmers,” said Sen. Ghislain Maltais, deputy chairman of the Senate standing committee on agriculture and forestry, “but their hands are tied,” when it comes to their ability to buy land.

The Senate committee released its report, the culmination of two years of work studying the issue, in Vancouver Monday before public hearings on the impact of climate change on agriculture and forestry.

The committee found that in 2015, it cost, on average, $5,400 to buy an acre of farmland in B.C. and $10,000 in Ontario — the highest price in Canada.

The committee’s report found multiple factors behind soaring farmland values, including low interest rates and strong commodity prices that bolstered farm businesses, but speculative purchases by institutional investors also served to boost values.

In B.C., particularly in the Lower Mainland, land values have also been pushed higher by buyers who build mega-mansions in agricultural zones, said Richmond Coun. Harold Steves, who is a longtime farming advocate.

“What it amounts to right now, the next generation in Richmond can’t take over (farms), the prices are too high,” Steves said, and he argues that the same dynamic applies across most of the Fraser Valley. That, Steves said, puts farmers in the position of having to lease fields as tenants, which comes with the insecurity of not knowing how long they will have to recoup investments made in sound farming practices, such as composting and crop rotation.

And Maltais, a senator from Quebec, speaking through an interpreter, said both levels of governments need to act to make sure Canadians remain in control of their land.

“If we don’t do our part in feeding the world, the world will come to us to feed itself,” Maltais said, if foreign investment funds buy too much Canadian farmland.