Foreign investors hit paydirt

Western Producer| 26 February 2015

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Foreign investors hit paydirt
Saskatchewan farmland is a profitable venture for investment funds, pension plans and megafarms

by Sean Pratt

There has been a marked change in Saskatchewan farmland ownership over the past two decades, according to a new study.

Investment funds, pension plans and megafarms own an increasing amount of Saskatchewan dirt.

The study looked at land ownership in three rural municipalities where there has been significant turnover: Excel, southwest of Regina; Lajord, southeast of Regina; and Harris, southwest of Saskatoon.

“We found that in a relatively short period of time there has been a significant change in land tenure,” said Annette Desmarais, Canada re-search chair in human rights, social justice and food sovereignty at the University of Manitoba and coauthor of the study, which will soon be published in the online journal Canadian Food Studies.

The researchers found that 8.5 percent of farmland in the RM of Excel was owned by outside investors, 9.4 percent in Lajord and 13.1 percent in Harris for an average of 10.3 percent.

Most of the investment in the RM of Harris is by what the study refers to as farmer/investor hybrids. They are not investment companies but they are also not the typical family farm.

The hybrids include Cor Van Raay and Van Raay Land Inc., who made his money in the Alberta feedlot industry. He owns 8,596 acres in the three RMs and 33,730 acres in the province.

Nil-Ray Farms Ltd. has also bought a sizeable amount of land. The company is owned by Brian and Lee Nilsson, who used to own one of Canada’s largest beef packing plants. Nil-Ray owns 8,923 acres in the three RMs and 14,802 acres in the province.

Desmarais said barely any land was owned by people other than Saskatchewan farmers 20 years ago.

Everything changed in 2002 when the province relaxed its farmland ownership laws to allow investment by all Canadian citizens and certain classes of Canadian-owned corporations.

Desmarais is alarmed by how quickly 10 percent of the land in the three RMs has been snapped up by investors and megafarms.

“There is certainly a significant amount of land that is changing hands and now being owned by outside investors,” she said.

That isn’t sitting well with farmers like Deb Smith from Kindersley, Sask., who is frustrated that her son has been forced to compete for land with well-financed land investors from Alberta.

“I don’t want our land being owned by non-Saskatchewan residents or corporations,” she said.

“If you want to own land in this province, you and your family must reside here, your children must go to school in this province and your entire family must be involved in activities in your Saskatchewan community. Otherwise, you don’t own land here. End of story.”

Desmarais said that was a common refrain from the farmers she spoke to in the three RMs in the study.

“The one thing people talked about a lot was just how quickly the price of land has risen as a result of all this interest by people who have a lot of money,” she said.

“The biggest concern that people seemed to voice is this is really an effective way to make sure that young people don’t have a chance to farm.”

The study did not explore what happened to land prices in the three RMs, which will be part of a future province-wide study about farmland ownership.

However, the authors did offer their thoughts on the subject.

“Larger farms and fewer farm families mean that many rural communities are unable to sustain the services and institutions that require a critical mass of users to continue to operate,” they said in the study.

“The steady erosion of schools, hospitals, churches and post offices as well as the closing of businesses, banks and grain elevators creates a downward spiral, making it more difficult to continue to live in these communities.”
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