Wednesday, September 12, 2012

Out of province investors may be eyeing our pastures

Ten or twenty years after these signs disappear who will own the pastures? 
The Saskatchewan government says it wants to sell the federal pastures (until recently known as the PFRA or Prairie Farm Rehabilitation Association pastures) to local farmers. Ag minister Lyle Stewart says that they intend to sell the pastures one by one to the “patrons groups” made up of the cattle producers who have been grazing them.

That sounds so reasonable and nice, tugs at those strings we all keep in our stubblejumper hearts. What could be better than local Saskatchewan people banding together to gain control over the land that they need to raise their livestock? It’s almost like those first agricultural co-operatives we remember fondly from before the days of Viterra and NAFTA.

But hold on here. The price of land in this province is leaping well beyond the reach of the small to medium sized family farms that the Sask Party claims to embrace in its messaging. And the prices are expected to go higher. It’s tempting to blame the galloping land prices on the current government but unfortunately the Sask Party doesn’t have a corner on messing up the conditions small farmers depend on to make a living.

Land prices quickly doubled after the NDP changed the out of province ownership rules in 2003 to allow Canadian buyers to purchase as much Saskatchewan farmland as they like. A few restrictions remain on foreign ownership of agricultural land but who knows? Smart lawyers might be able to help investors get around them.

Paul Hanley’s column on the issue in the Star-Phoenix recently used the following quote from an online article titled, “Foreign Ownership of Saskatchewan Farmland”, on the website of the MLT law firm.

“Saskatchewan has received a lot of attention in the world press and investment community over the past several years. In particular, investment in Saskatchewan farm land has been on the radar of some of the world's most prominent investors for several years."

The MLT article goes on to say that although foreign buyers can't legally buy Saskatchewan farmland, "there are some narrow avenues that, with careful planning, may allow foreign investors to obtain an interest in Saskatchewan farm land." That should be enough to scare anyone concerned about the way farmland is used in this province.

So what does this mean for the 1.8 million acres of critically endangered grassland that the Saskatchewan government is putting on the market? It could mean that while the prices may be far too high for the local grazing patrons to afford on their own, all that money waiting at the border for those fast return land investments will find its way into the hands of the patron groups. And it won’t be a gift.

The investors will have their upside and expect to gain control over the land within a certain time frame or they will have covert control over the way the land is used right from the beginning. Either way, before long, Canada’s greatest prairie conservation lands--nurtured through 75 years of publicly funded management and oversight--could end up in the hands of businessmen whose addresses are in Calgary, Toronto, or Vancouver. Or even farther afield if the lawyers at places like MLT are able to find the loopholes and workarounds that will let foreign investors in on the game.

Right now, the Saskatchewan government requests identification from out of province buyers to verify the land will remain in Canadian hands, but as Mark Folk, GM of the Saskatchewan Farmland Security Board, said in the paper this week, some Canadians may already be buying land to hold for foreign investors.

But surely this can’t be happening with the pasture lands too. If the local cattlemen in those “patron groups” are being approached by people with out of province money, surely they realize that these investors will sooner or later take control of the pasture and do what they want with it: sell it for a profit, or set terms that will make it impossible for small operators to make a decent return grazing. Either that or the investor-profiteers will push the stocking rates so high they will ruin the land. No one benefits from that. . . .or do they?

A friend reminded me of another factor in this quagmire of unenlightened self-interest threatening to swallow up the PFRA grasslands. The average age of the men in those patron groups is well above fifty. Most of them only need a few more good years before they sell out and retire. Many in the patron groups might be happy just to have a few years of grazing at reasonable rates to bridge them over and whatever happens after that in the long term--well that is out of their hands, isn’t it?

Meanwhile, Canada’s cattle herd is dropping fast and with rising feed grain prices things are not looking good. Someone showing up with enough money to get the patron groups some cheap grazing for ten years might just look like a savior, and who can blame a man who is just wanting to retire comfortably? It doesn’t take a business genius to imagine the kind of quid pro quo corporate investors might propose to a group of cattlemen desperate for cash.

I want to believe that the Brad Wall government is not doing this on purpose, or turning a blind eye as the patron groups make deals with devils from out of province, but it is beginning to look like they could easily make a show of working with “local patron groups” to sell the PFRA pastures, while using or at least allowing them to act as a cover of local legitimacy hiding the fact that the land has been sold (or will ultimately be sold) to out of province land barons.

Lyle Stewart, our Agriculture Minister has assured us that all the lands sold will have conservation easements, but the provision of conservation easements is not enough to conserve the biodiversity and carbon and soil of the grasslands. Conservation easements are never monitored properly and at best might (and only might) prevent the owners from outright ploughing. There are a thousand ways to ruin a pasture and degrade its ecological value that have nothing to do with ploughs and everything to do with human cupidity and ignorance.

If we let the Saskatchewan Government sell the community pastures to groups supported by hidden backers from out of province, the local patrons now being used as tools of capitalization will be soon cast aside. Twenty years from now, how many local farmers with forty or sixty head of cattle will have access to these lands? How long will it take to clear the land of small, local livestock operations and replace them with a kind of agriculture that better serves the interests of investors?

We can be fairly certain that land prices will continue to rise, and when they go high enough the helpful investors from out of province will do what capitalists always do: sell high to cash out. And the highest prices may come from offshore investors, especially if Saskatchewan buckles to pressure to further liberalize restrictions on foreign land ownership. Before long, there could be a new kind of absentee landlord owning the grasslands that have for 75 years been conserved as the crown jewels of prairie conservation in Canada.

This is the central reason the PFRA pastures must be kept in the hands of all Saskatchewan people.
Once the land is no longer part of the public trust and is in private hands, the economic benefits will outweigh any ecological considerations and will serve distant investors instead of the local farm communities. Will land corporations from Ontario or Beijing care what happens to the burrowing owls and Mormon Metalmark butterflies on the pastures?

It is never in the interest of local people to allow the commons to be cleared, to have their access to and benefits from local pastures be thrown aside. If we stand by and let these sales happen, Canada’s richest grassland remnants will before too long be cleared of the activities and ecologies that serve the local community so that industrial agriculture and other kinds of development (oil and gas for example) can have exclusive and unimpeded control.

Golden eagles like this one hunt on the pastures, photo courtesy of Hamilton Greenwood


  1. Quit your fear mongering! If the land can't be broke for annual cropping or recreational development, foreign investors won't have the opportunity to generate as much revenue as they can on crop land.

    If migratory species such as the burrowing owl aren't protected on both sides of the 49th parallel. Are we wasting our tax payers time and money?

  2. If rules against breaking grassland were enough to protect the biodiversity and ecological services on native pastures, you'd be right and there would be nothing to fear. As anyone studying grassland ecology can tell you, though, there are many ways to abuse and severely degrade grassland that stop short of outright ploughing. To see what I mean all you have to do is count the bird species in a well-managed federal pasture and then do the same for a private pasture that has been mismanaged.

  3. Sadly the Saskatchewan PCs, while saying they want to attract capital, have already interfered in the potash market and are now discussing farmland. What’s next? Perhaps the oil and gas sector, telecoms, local muffler shops? The economy is going to be in bad shape for the foreseeable future and the PC government should be trying to attract capital not drive it away. By continuing to adopt misguided policies that are hostile to capital, the Brad Wall team will start to look like the NDP in sheep’s clothing and the investment community will react accordingly – they have long memories. None of this will be good for the Saskatchewan economy. The rules are clear – non-residents cannot own Saskatchewan farmland and the FLSB enforces those rules. The farmland sector has and is being driven by farmer-to-farmer transactions. The debate around fully compliant Canadian investors (ie 100% Canadian resident) is a red herring put forward by a group of farmers who long for the days of the NDP.

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