Farmland values more than doubled in Saskatchewan over a decade. Photo / Thinkstock
Farmland values more than doubled in Saskatchewan over a decade. Photo / Thinkstock
Saskatchewan, Canada's biggest agricultural province, imposed a temporary ban last month on certain investors acquiring farmland, reports Bloomberg.
The Government's concern is that surging land values fuelled by pension-fund investment - while a boon to retiring growers - deters younger ones, boosts agricultural debt and threatens to create more tenantfarmers.
The ban has created a dilemma for the growing number of older farmers seeking to unload their land and halted planned purchases by investors including the country's largest pension fund.
As much as C$50 billion ($55.8 billion) of farms across Canada, the world's second-largest wheat exporter, will be sold by growers to finance their retirements over the next 15 years, according to investor Bonnefield Canadian Farmland.
Saskatchewan, home to more than 40 per cent of Canada's agricultural land, temporarily banned farm purchases by investment trusts and pension funds on April 13 as it reviews the Farm Security Act. The Government is reviewing whether to make permanent restrictions or relax rules and let anyone buy.
Increased investor demand could make land too expensive, turning more farmers into renters, and "therefore making farms possibly more at risk", Saskatchewan Agriculture Minister Lyle Stewart told Bloom-berg.
"The concern with farmers is also that foreign investors or institutional investors would drive the price of land beyond what it's really worth," Lyle said.
Farmland values more than doubled in Saskatchewan over a decade to C$881 per 0.4ha by 2013, Statistics Canada estimates.
