Report from Parkland Institute suggests that real estate investors are at fault preventing new farmers entering Alberta industry.
By Andrew Joseph, Farms.com
Parkland Institute, based in the University of Alberta has released a 54-page report entitled Finance in the Fields: Investors, Lenders, Farmers, and the Future of Farmland in Alberta.
The report infers that that farmland investors are the ones increasing land prices making it difficult for new farmers to enter the industry.
Parkland Institute is an Alberta research network that examines public policy issues.
Lead researcher and report writer Katherine Aske said in an accompanying press release that, “The roots of the current shift go back to the 2008 financial collapse, when investors searching for more stable places to store their wealth began buying farmland in droves everywhere—including, as the report shows, in Alberta.”
With data gathered from Statistics Canada, Aske said that with farmland prices rising, it has extended beyond the actual value of the farmland.
Alberta farmland, she noted, is now double the cost of similar acreage in Saskatchewan, and with the rise in farmland pricing, Alberta has seen an increase in the number of farmers working rented property.
She explained: “Tenant farming, in turn, leaves farmers in precarious economic positions and disconnects them from the long-term health of the land. Renting restricts farmers from implementing regenerative practices such as seeding green manures or transitioning to organic agriculture.”
Of course, ag rental prices are also on the rise.
Just as in the larger Canadian cities experiencing highs in urban and suburban housing where young families can’t afford a home, the report’s data asks just who the next generation of farmers will be.
The report noted that the high price of farmland, start-up costs, and always iffy thin profit margins all work to discourage newcomers to the farming industry, which Aske said is “creating a crisis of generational renewal.”
Not all doom and gloom, Aske does suggest that there are ways to reverse the situation, including redistributive land reform, a return of public banking, and even a farmer pension plan.
The Full Report can be seen HERE.