business
At any price The rumours are wrong. Most farmland still gets bought by farmers… at least for now By Richard Kamchen
aybe a huge change in Canada’s land ownership really is underway. Certainly the time is ripe. The big money funds are desperate for a safe haven. Overseas interests are anxious to lock up production capacity, and investors everywhere are looking for a slice of what they see as agriculture’s windfall. Everything seems to back up the growing suspicions that huge amounts of non-farm money must be flooding into Canada’s land market. Everything, that is, except the sales statistics. Despite all the forecasts about farmers becoming renters, and despite all the fears that land prices are rising out of the reach of farmers, almost all farmland still gets bought by farmers. That doesn’t mean change isn’t coming, or that maybe the first glimmers of it might already be visible. Yet this is hardly a wide-open, unregulated market, and the restrictions and regulations 30 country-guide.ca
appear to be doing just what they’re designed to do, keeping a lid on how much acreage slips off farmers’ hands. The country’s crystal ball gazers do see a permanent change coming. “In Canada, the whole trend toward other people owning farmland is going to increase,” says David Sparling, professor at the Richard Ivey School of Business at the University of Western Ontario. “What you’re starting to see are investment groups looking at farmland.” Sparling knows he isn’t the only one making these predictions. Rural acres are attracting nonfarm dollars because farmland represents a very stable investment, providing more security than volatile stocks and better odds than high-risk commodity markets. Not only are farmland values rising, but history says they’re highly resistant to deflation, and of course they also provide a stream of rental income. “All of those things are making people a lot more interested and aware of agriculture, and that March 1, 2012