In recent years, pension funds have started buying up farmland around the world, seeing it as a safe, long-term investment. Farmland investment companies like AgCapita, Assiniboia Capital, Bonnefield Financial and Prairie Merchants are sowing the seeds of speculation across the prairies. Saskatchewan, with our low land prices and a farming population averaging 58 years old, is shaping up to be very fertile ground for them.
Already hundreds of thousands of acres of Saskatchewan farmland are under the management of these investment companies. Several seek to attract “institutional investors” such as pension funds and RRSP-eligible mutual funds to finance further land purchases. AgCapita, which as of 2011 had purchased $12.8 million of Saskatchewan farmland, is RRSP eligible. Two RRSP mutual funds, Golden Opportunities and SaskWorks, have invested in farmland investment funds. SaskWorks has invested $20 million with Agco Ag Ventures, and Golden Opportunities has funneled $3.5 million into Assiniboia Capital (via ADC Enterprises) as well as another $2.5 million into Input Capital Limited Partnerships, a division of Assiniboia. Some of the financing for Assiniboia Capital’s acquisition of over 115,000 acres across Canada has been provided by Farm Credit Corporation, which is funded by Ottawa and pays dividends to the federal government.
Retiring farmers and those suffering under the high debt levels seemingly inherent to modern farming are targeted by these companies. While the investment companies wait for the selling price of this land to rise to sufficiently profitable levels, they rent the land back to farmers. Usually this is done on a cash rent basis where all of the day-to-day risk of farming is borne solely by the renting farmer. This situation has similarities to that in Europe of the 19th century — ironically a situation that led many Europeans to uproot their families and escape to settle in Canada.
Retiring farmers are faced with a choice: look to pass your land on to another family farmer, possibly taking less than the maximum value, or sell to the highest bidder with no concern for the legacy of the land. Retiring farmers should be happy in their twilight years; urbanites with pensions invested in farmland are happy with the long-term outlook of their retirement monies; the land grabbing companies are happily taking their cut as land values and rents keep rising. But how do we expect young Canadians to consider becoming farmers? The unavoidable reality is that today there are not enough young farmers. Farmers under 35 only represent 8% of the farming population, begging the question, “Who will work the land in the future?” Who will grow our food?
This is where the long-term vision of retirement planning seems to have a blind spot. Speculation around farmland is already putting the cost of land out the reach of many individual farmers looking to either start or expand an operation, leaving investment companies with millions of dollars in capital in an even better position to increase their land holdings. If more of them are able to generate investment dollars through RRSPs, it will further this cycle. While policies and tax breaks that encourage Canadians to plan responsibly for their retirements are essential, there is a clear lack of planning for the next generation of farmers. Family farms have been the backbone of Canadian agriculture for our entire history and now they are being priced out of the market for the most essential of assets: the land.
Without a plan and policies in place to ensure that the next generation of Canadians can carry on our proud farming tradition, the only future in store for Canadian agriculture is one occupied only by the largest, most corporate farms sparsely scattered over an increasingly empty prairie. This is not a future that bodes well for Canadian food security and sovereignty — and it certainly does not look promising for family farms. That is not a future I want to see in Canada.
In “The Apprenticeship of Duddy Kravitz” Mordecai Richler wrote “A man without land is nobody. Remember that Duddel.” I wonder what Duddy’s grandfather would have to say about a farmer who has no land?
Twenty-eight year-old Matt Gehl is a National Farmers Union Board Member who farms grain with his family near Regina.