High Alberta Farmland Prices

Parkland Institute, based at the University of Alberta, released a report on land prices called “FINANCE IN THE FIELDS”. The report intimates that agricultural land investors are the cause of higher farmland prices resulting in a barrier to entry for the next generation.

I believe farmland prices have never been cheap. I also believe that investors never pay extra. Investors are buying sustainability, an alternative investment, a safety net in food production, diversification and wealth appreciation. It’s a price that’s fair to them….Is it fair to the seller?

No doubt the next generation of farmers have barriers of entry and land being only one of many. High input and capital costs, Mother Nature issues and simply dealing with perishable commodities are also major challenges and barriers.

Patient capital invested in farmland is needed. Patient capital gives farmers access to more acres, reduces fixed costs, provides economies to scale and can even facilitate transition planning. For me, the rental or joint venture agreement is equally important if not more important than an investor purchasing farm land. You cannot buy STEWARDSHIP; you EARN IT THROUGH THE LOVE OF THE LAND.

I agree with the report that we need a systemic transformation. However, this requires the co-operation of many players and ideologies focused on a common cause.

We all need each other in accomplishing great things; however, if we do not get the land right then nothing else matters.

Your Thoughts?

I look forward to next week when I'll be talking about BILL C-8 AND BILL C-19 - NOW LAW...

Fred Mertz
Fred@thevoiceofagriculture.ca