The Standing Senate Committee on Agriculture and Forestry
Rising farmland costs are hurting farmers, Senate committee says
March 20, 2018
Vancouver – Rising farmland prices threaten the viability of the family farm, the future of Canada’s agriculture sector and a traditional way of life for thousands of Canadian families, the Senate Committee on Agriculture and Forestry said in a report.
In 2015, for example, the average price of an acre of farmland in Canada rose by 10% over the previous year. This puts farming in a pinch: established farmers are tempted to sell their land to developers while younger farmers, without much credit history, don’t have the capital to buy land.
Basic economics — supply and demand — is the reason for the steady rise in farmland prices. Good farmland is being converted for residential and commercial development, Canada’s growing population needs more places to live and farmers are cashing in on their land to support their retirement plans.
The committee’s report, A Growing Concern: How to Keep Farmland in the Hands of Canadian Farmers makes five recommendations aimed at helping farmers acquire the land they need to make a living, including tax reform proposals and land-use planning changes.
If the government increased the amount of money established farmers could receive from the sale of their property without having to pay capital gains tax on it, it could make it easier for new farmers to buy land, the report says.
Also, because many of the reasons for the increasing cost of farmland are related to land-use planning policies, the committee urges the federal and provincial governments to provide funding for research on farmland protection and to enhance the tools used to track land transactions.
- Canada’s footprint for farming is approximately 65 million hectares — nearly 7% of the country’s total area.
- The average price of an acre of farmland rose by 10% in 2015, with Alberta, Manitoba and Quebec experiencing double-digit increases. Ontario had the highest price at $10,000 per acre; Saskatchewan had the lowest at $1,200.
- Farm debt in Canada grew to $84.4 billion in 2014 from $78 billion in 2013, according to Agriculture and Agri-Food Canada data. Farm Credit Canada says farmland accounts for 67% of total farm assets and farmers question their ability to pay off their mortgages if interest rates rise.
“Economic conditions are conspiring against farmers, who already encounter more adversity than they need. 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.”
- Senator Diane F. Griffin, Chair of the committee
“Canada’s hard-working farmers are facing a new challenge from the high cost of farmland. If the government doesn’t act to bring some relief, Canada risks a calamitous decline in a vital sector of the economy and the loss of a traditional way of life for thousands of farmers and their families.”
- Senator Ghislain Maltais, Deputy Chair of the committee
- Read the report, A Growing Concern: How to Keep Farmland in the Hands of Canadian Farmers
- Follow the committee on social media using the hashtag #AGFO.
- Sign up for the Senate’s eNewsletter.
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Senators Robert Black, Diane F. Griffin (committee chair), Ghislain Maltais (committee deputy chair) and Raymonde Gagné share findings of the Senate Committee on Agriculture and Forestry’s report at an official announcement in Vancouver on Monday, March 19, 2018.