Farmland rush adds to boom

 

09 9월, 17:10www.thestarphoenix.com

Saskatchewan people have become all but inured to the regular news of the oil rush, potash rush and uranium rush that have made this province one of Canada's top exporters and job creators.

 

 And the cities have been struggling to deal with the upsides and downsides of ballooning prices of real estate and housing.

 

 But the province has been experiencing another rush that has flown under the radar. According to the Farm Credit Canada's report on land prices for the first half of the year, Saskatchewan has been experiencing a land rush since 2002.

 

 Over the last three reporting periods, beginning in early 2012, farmland prices in Saskatchewan have been flirting with an annual increase of about 10 per cent. For a province that hit the skids in the early 1980s, when sky-high interest rates, attempts at nationalization and extremely restrictive legislation regarding land ownership in Saskatchewan all but froze prices, this new world of escalating prices speaks well of the confidence that buyers have in the future of agriculture.

 

 That optimism is reflected across Canada, according to the FCC report. Manitoba prices rose nearly 14 per cent in the last half of last year. Alberta's rose by 7.2 per cent and ontario's by 11.9 per cent. In Quebec, prices shot up an astounding 19.4 per cent.

 

 According to The Globe and Mail's Barrie McKenna, one of the reasons prices have gone so high in Central Canada is the excess of cash in the hands of farmers, who are protected by marketing boards but are unable to spend on new quota.

 

 But in Saskatchewan, according to the FCC report, the demand is being driven in part by interest from out-of-province buyers, while some retiring farmers have decided to sell their blocks of land while the price is good. To have those who contributed so much for so long to the heart and soul of Saskatchewan retire in dignity can't but be a good thing.

 

 But, this positive news also comes with a dark side. While the government has controls in place that continue to limit the ability of absentee foreign nationals from owning too much land in Saskatchewan, there is no easy mechanism to track where all the money is coming from to buy the land. Saskatchewan, with nearly half the agriculture land in Canada, cannot afford to lose too much control over this resource.

 

 Also, while the high prices are good for those who want to leave the land, the cost makes it hard for the next generation to take over. This could be exacerbated by the tendency in the province to sell farmland without first advertising it.

 

 As the FCC report says, "Landowners who rented out their property continued the trend of selling privately to their tenants."

 

 There is also the danger that higher interest rates or even bank failures may dictate Saskatchewan's agricultural potential. In the meantime, however, the influx of new capital into the province is a welcome contributor to Saskatchewan's booming economy.

 

 The editorials that appear in this space represent the opinion of The StarPhoenix. They are unsigned because they do not necessarily represent the personal views of the writers. The positions taken in the editorials are arrived at through discussion among the members of the newspaper's editorial board, which operates independently from the news departments of the paper.

 

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