Protecting farmland for today and tomorrow
We need the Lands Protection Act to protect us from the incredible wealth of people who live just beyond our borders and see our land as nothing more than a commodity to be bought and sold, like silver or gold.
—Horace Carver, Q.C. | Lands Protection Act Commissioner, PEI (2013)
Land is fundamental to agriculture. Who owns it, controls it, and how is it used and cared for are critical matters for the NFU.
We believe that those who work the land should have control over the management of their food production unit. We view with alarm the encroachment of industrial corporations into the business of primary food production through direct ownership, vertical integration and contract farming. When investment of capital, whether foreign or Canadian, excludes local farmers from the land, rural disintegration occurs and food sovereignty is impossible.
Our farmland is a precious resource. It makes up less than 10 percent of Canada’s land mass. Since 1976, over 10 million acres of farmland has been lost. More than half of Canada’s prime farmland (Class 1, 2 and 3) lies within commuting distance to major population centres, making it a target for suburban, peri-urban and industrial development as well as real estate speculation.
Farmland is not only lost due to sprawl, but also by farming methods that weaken the productive capacity of soils. It has become necessary for the farmer to increase yields in the short-term in order to cover increasing production costs and to minimize the effects of the cost-price squeeze on the operation. Excess financial pressure due to debt or excessive rents forces the land to provide an income stream beyond the soil’s sustainable capacity. The NFU is in favour of incentives to help farmers rebuild soil health.
Access to land is a critical question for the young and new farmer. Ownership is often out of reach due to the high cost and debt required to purchase. The NFU supports a lively discussion of alternative forms of land tenure that provide long-term access and which support environmental stewardship and community-building.
Larger land holdings and the increasing size of farm implements create a vicious circle of concentration of farmland ownership and deterioration of rural communities and erosion of rural quality of life. As land prices increase, the higher value allows farmers to borrow more to buy bigger equipment – displacing more neighbours and putting greater pressure on the soil. As the cost of staring to farm keeps going up, farming is less and less possible for the younger generation.
In order to save the family farm, Canadian governments and farmers must have a clear understanding of what constitutes a family farm. The NFU endorses the following definition: “A family farm is an operation that produces food or other agricultural products and where the vast majority of labour, capital, and management are provided by family members.”
The NFU has undertaken two major studies of farmland ownership and control: Losing Our Grip: How Corporate Farmland Buy-up, Rising Farm Debt, and Agribusiness Financing of Inputs Threaten Family Farms and Food Sovereignty (2010) and Losing Our Grip: 2015 Update.
As a result, the NFU recommends:
1. Canada and its provinces must enact a unified set of land ownership restrictions wherein farmland can be owned only by individuals who reside in the province in which the land is located, or by incorporated farming operations (including co-operatives) owned by individuals who reside in the province in which the land is located.
2. Provincial governments should monitor foreign and domestic ownership and control of farmlandwithin its boundaries and publicly report changes annually. Provinces should also consider legislating appropriate maximum size of land holdings per individual, per incorporated family or cooperative farm and per corporation as has been enacted in Prince Edward Island.
3. Differential taxation rates should encourage ownership by farm families and other local citizens and discourage investors and large corporations from buying and owning farmland. Farmers and other local residents should be charged lower tax rates than investors, foreign interests, non-farm corporations, and large farming corporations with numerous shareholders, should be taxed at higher rates. Investments in farmland investment companies should not be RRSP eligible.
4. Governments should provide incentives and support for land stewardship practices that maintain the land’s productivity for the long term along, and corresponding penalties for using farming practices designed to extract maximum rents in the short term at the expense of soil health, biodiversity, water quality and other environmental benefits.
5. The Government of Canada and the provinces must set up mechanisms for farm family intergenerational land transfers that do not rely on loans and interest payments. Governments must find ways for young and new farmers to gain secure access to farmland that does not require massive indebtedness. Such mechanisms could include:
- Community-owned land trusts and land banks to ensure food production by local farmers
- Community-based financing options (that retain interest-payment dollars within local communities)
- Government agencies that support seller-finance options. (Sellers and buyers could self-finance, and the role of the government agency would be to step in to address rare instances when transactions go bad and there is a need to return the land to the seller)
- An income-assurance plan for beginning farmers to assist them in becoming established and support their long-term success
- A retirement savings program or pension plan specifically designed for farmers that would reduce their need to rely on selling land to fund their retirement.
6. Transferring farmland to non-agricultural uses must be restricted and curtailed. Industrial or residential development on Class 1, 2 or 3 farmland should be prohibited. All provinces should enact legislation to protect their farmland using the laws of BC, PEI and Quebec as a starting point to improve and expand farmland protection across Canada.