Drew Spoelstra, vice-president of the Ontario Federation of Agriculture and a farmer in Binbook, Ont., checks a soybean crop with his daughter Hadlea, 5, on their farm.Photos by Nick Iwanyshyn/The Globe and Mail
The average value of farmland and related buildings across Canada jumped 22.7 per cent in five years, making it more difficult for younger farmers to enter the industry, Statistics Canada says.
More than 60 per cent of Canadian farmers are 55 years or older, according to the agency’s 2021 census on agriculture, and the number of young farmers (under 35) has decreased to 8.6 per cent in 2021 from 9.1 per cent in 2016, the previous Statscan census.
The rising value of land represents a hurdle for young farmers who want to start a business either by the traditional way of transitioning a farm from one generation to the next or by renting land.
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Mr. Spoelstra and his daughter check on the horses at his farm. He says rising land prices are a concern for any young farmer starting up.
Drew Spoelstra, vice-president of the Ontario Federation of Agriculture and a farmer in Binbrook, Ont., who is in the early stages of farm-succession planning, said the rising land prices are a concern for any young farmer starting up, as it could complicate the process of transferring farm assets to family members.
“Every generation that’s retiring would like to get the most out of their payment, but I would like to think there are a lot of farmers out there that want to see a successful business passed on to the next generation,” Mr. Spoelstra said.
He said young farmers face more challenges than ever, including rising input costs, higher interest rates, inflation and climate change.
Patrick Verkley, 31, has recently started his chicken farm in Strathroy, Ont., by taking over a portion of the farm that has been transferred within the family through a couple of generations.
“Farm succession has always been challenging, and the particulars of the current environment make that even harder given where asset prices are,” Mr. Verkley said.
He said the current high farmland values would have made it even harder for him to buy a portion of the farm, as he would have had to pay more.
“I took out a substantial amount of debt in order to get my own farm,” Mr. Verkley said. “If we were to make it go today, it would basically mean my parents would have to sacrifice even more in order to help me get started.”
Mr. Spoelstra says young farmers are faced with growing challenges such as rising input costs, higher interest rates, inflation, and climate change.
He said passing on the farm to the next generation would give them more time to learn about farming processes.
“Handing over control of the farm sooner than later means the next generations got even longer to get better at what they do, how they manage it, and how they run their operations,” Mr. Verkley said.
The significant increase in farmland prices has made it difficult to transfer a farm to the next generation and for younger people to get into farming through renting, said Alfons Weersink, professor in the Department of Food, Agricultural and Resource Economics at the Ontario Agricultural College.
“The current generation provides or sells the operation or transitions by giving the next generation somewhat of a discount on the purchase price of that operation,” Dr. Weersink said. “The higher land value has made it a little more complicated for the intergenerational farm transfers.”
In addition, as farms are getting bigger, the agricultural land costs would become even higher, creating an additional barrier for younger farmers, said Ellen Goddard, agricultural economist at the University of Alberta.
“The average size of farms is going up, and that in and of itself is potentially problematic if you’re a starting-out farmer because as the farm gets bigger, the equipment needed on the farm also gets bigger and more expensive,” Dr. Goddard said.
She said it is crucial to take a more nuanced look at the statistics about the average age of farmers in Canada. That’s because farms generally are no longer operated by one person, and that most of the stats focus on who owns the farms.
“The average age of the management team could be quite a bit lower,” she said.
Mr. Spoelstra believes there are many farmers who would like to pass on a successful business to the next generation.
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