A new research report published by the Parkland Institute argues that a crisis is brewing in rural Alberta. An influx of investors buying farmland is making land more expensive as farmers struggle, tenant farming becomes prevalent, and very few can afford to get started as new farmers.
The report by Katherine Aske—"Finance in the Fields: Investors, Lenders, Farmers, and the Future of Farmland in Alberta"—shows how big investors with deep pockets dramatically changed rural Alberta and the relationship between farmers and the land they farm. Katherine Aske draws from interviews she did with farmers and other people in the agricultural sector across Alberta. She explains, "The roots of the current shift go back to the 2008 financial collapse, when investors searching for more stable places to store their wealth began buying farmland in droves everywhere—including, as the report shows, in Alberta." Farmland prices skyrocketed and were raised far beyond the land’s agricultural value, and are now double what they are in Saskatchewan (Statistics Canada 2020). "The new reality is that many farmers purchasing land in Alberta cannot pay it off in their lifetimes just by farming it."
As land became prohibitively expensive, Alberta also saw a steep increase in the number of farmers working on rented land. "Tenant farming, in turn, leaves farmers in precarious economic positions and disconnects them from the long-term health of the land. Renting restricts farmers from implementing regenerative practices such as seeding green manures or transitioning to organic agriculture," explains Aske.
Blake Hall—a first-generation farmer from central Alberta, says, "This report highlights the challenges that farmland consolidation and financialization creates for farmers of all stripes. It documents the steady march of government and banking policy which removes farmers from the land and creates a feudal system without even realizing it."
This trend hasn’t gone unnoticed by farmers like Ken Larsen, who’s been running a farm west of Red Deer for the last 46 years: "Even established farmers, let alone young agrarians, are being priced out of the land market," he says. Larsen says this report asks some defining questions about the future of farmland in Alberta: "Who will be the next generation of farmers? How will this vital resource be managed?"
Although renting has long been an alternative to purchasing land, it has now become an essential strategy for coping with farmland prices. However, "renting is no easy solution to high farmland prices," says Aske, pointing out that rental prices have also been rising to troublesome levels.
High land prices compound with other startup costs and low net incomes to inhibit newcomers to farming, creating a crisis of generational renewal. "The same factors that are making life difficult for established farmers are outright impeding new farmers from entering the sector," says Aske.
The report argues that, even as these trends taking place in Alberta accelerate and become more prevalent, there is nothing inevitable about what is going on. "The future is open," says Aske. Change could come in the shape of public policies brought about by the political pressure of organized communities. "If put under enough public pressure, there are a wild number of transformative state actions we could imagine. Redistributive land reform, the return of public banking and a farmer pension plan are just a few examples."
Blake Hall agrees that grassroots action is the way to a better future for farming: "The antidote to this disruptive force will come from the very communities that have been affected by it," he says.
For more information or to arrange an interview, please contact:
Communications Coordinator, Parkland Institute