By Merle Massie
Last week, the Saskatchewan government (led by Brad Wall and the Saskatchewan Party) reset a course direction that had veered off target. That course redirection affects who – along with what – is allowed to purchase Saskatchewan farmland. A Canadian citizen? Come on down. A Canadian-owned corporation engaged in the business of farming? Saskatchewan agriculture is open for business.
A pension fund? A complicated company structure with significant offshore investors? Hmm, maybe not.
The new direction, which moves to once again restrict investment firms and pension funds from buying Saskatchewan farmland, has enormous effects on the agriculture industry. Saskatchewan land prices, by world standards, are extraordinarily cheap, yet production value remains high. When combined with future world population forecasts, large-scale investment firms and private investors are betting that farmland will remain a safe place to hold and grow their money. A cash crop, so to speak. And they want in.
Saskatchewan farmland prices roses astronomically between 2001 and 2014. In 2013 alone, Saskatchewan farmland value grew 28.5%. But under Saskatchewan’s farm land laws, foreign nationals can only own a maximum of 10 acres – unless they seek and obtain approval from the three-member Farm Land Security Board.
That same board approved the sale of 115,000 acres to Canada Pension Plan Investment Board (CPPIB) in 2013. Immediately, their decision raised hackles. When Skyline Agriculture Financial Corp, a foreign-backed player allegedly looking to finance as much as $1 billion in farmland purchases over the next decade came knocking, the Farm Land Security Board obviously had second thoughts. Skyland’s bid was denied at the end of January 2015.
Not everyone lauds this move. National Post writer Jesse Kline asks: Whither fiscal conservatism? Is Premier Brad Wall a meek liberal sheep, hiding in conservative wolf clothing? This protectionist stance, Kline argues, is ridiculous. Unchecked investment in a truly open market is a fiscal conservative hallmark. Farmers need to “deal with the same market forces as any other business.”
But as a historian, I’m deeply concerned with Kline’s assessment. Continue reading →