Brady Deaton, Jr. - FarmSmart · PDF fileNon-farmer ownership of farmland is a historic issue...
Transcript of Brady Deaton, Jr. - FarmSmart · PDF fileNon-farmer ownership of farmland is a historic issue...
Brady Deaton, Jr. Podcast Series: http://www.uoguelph.ca/fare/FARE-talk/index.html
twitter: @BradyDeatonJr
Three Questions and a Surprise:
Farmland Ownership & Farmland Rental Markets
Three Questions
• Who owns farmland that is being rented to
farmers?
– How much farmland is owned by foreigners?
• Does the type of owner influence rental rates?
• Do farmers treat their own land like land they
rent in?
Non-farmer ownership of farmland is
a historic issue but remains important
• “In ___ the economists interested in agriculture put
together a discussion… [regarding] the rapid increase in
the system of land renting, the absorption of small
holdings by wealthy landowners…” See Barkley (2008)
• “The increasing separation between landowners and
farm operators is one of the major stumbling blocks for
policy makers when they try to design farm policy.” See
Schmitz, et. al (2010, p.16)
1897
Soil Conservation Also An Historic Issue
“I hold that ploughing beyond what is necessary… is
injurious to the soil….and this is one of the great
practical improvements belonging to the system I have
styled…” (p.86). Statement made by farmer in Upper
Canada circa ____.
– See “A History of Agriculture in Ontario” by G. Reaman, 1970.
1860
% of Farmland Rented
Source: Statistics Canada.http://www.statcan.gc.ca/pub/95-632-x/2007000/t/4129750-eng.htm
0
5
10
15
20
25
30
35
40
45
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
% F
arm
lan
d A
cre
s R
en
ted
Year
ON
MB
Canada
Method
• Introduction to Approach
– Area
– Sample
Study Area
7
Example of Data Collection Method
IPSOS Forward Data
Base of 16,905 Farmers June-September 2010
836 Farmers Contacted
501 Farmers
Participate
(60%)
333 Farmers Rent
(66% rent)
501
properties
399
102
Answer the Questions !
• Who owns farmland that is being rented to
farmers?
– How much farmland is owned by foreigners?
10
36%
19%
16%
10%
7%
5%
4% 2%
Ontario Landlords (Categorized by tenants who cash rent )
Rural Resident
Retired Farmer
Owner Invest
Active Farmer
Widow(er)
Invest Company
none of the above
Government
Observations 392 Research conducted with James Bryan and A. Weersink
Answer the Questions !
• How much farmland is owned by people who reside
outside of Canada?
Foreign Farmland Ownership in US and Ontario
Domestic 98.3%
Canada 34%
Netherlands 17%
All Other Countries
49%
Foreign 1.7%
Landownership in US Farmland and Forestland (Acreage)
Identified as In-Canada
99.03%
Identified as Out-of-Canada 0.97%
Ontario Farmland Ownership on Tenants’ Largest Parcel
Rented in (Number of Rental Contracts)
Source:
Nickerson, C.J., M. Morehart, T. Kuethe, J. Beckman, J. Ifft, and R. Williams. 2012. Trends in US farmland values and ownership. US
Department of Agriculture, Economic Research Service.
Nadella, K. 2013. An Examination of the Adoption of Conservation Practices on Owned and Rented Farmland in Ontario and Manitoba.
Msc Thesis. University of Guelph.
Answer the Questions !
• Does the type of owner influence rental
rates?
Landlord and Mean Cash Rent categorized by tenants who cash rent.
(2010 Survey Year n=392) (2013 Survey Year n=128)
Landlord Category % Mean Cash Rent % Mean Cash Rent
Rural Resident 36 102 Non-Farmer Inv.1 41 109
Retired Farmer 19 110 18 157
Owner Invest 16 97
Active Farmer 10 125 13 167
Widower 7 137 11 109
Invest Company 5 105 1.5 150
Other 4 108 14 109
Government 2 61 1.5 35
1. Rural resident and owner investor were collapsed into non-farmer investor.
**Little Evidence of Statistical Sig. See Bryan, Deaton, Weersink (2015)
Answer the Question!
53% 39%
7%
A survey of 810 farmers in Ontario and Manitoba
Yes
No
Don't Know
Refused
Do Farmers take better care of the land they own
than the land that they rent?
Testing the Hypothesis
Own Land Rented Land
Control for
1. Field Characteristics (Soil texture, topography, etc)
2. Crop Choice
3. Ag Improvements: e.g., tile drainage
Conservation Tillage
• If farmer indicates minimum till or no-till
was used on the specified parcel, then
they are considered as using
“conservation tillage.”
Cover Crops
1. Red Clover
1. Oats
2. Fall Rye
3. Oilseed Radish Fall Rye
Source:
http://www.omafra.gov.on.ca/english/crops/facts/cover_crops01/cover.
htm
Adoption of Conservation Practices in Ontario
0
10
20
30
40
50
60
70
Conservation Tillage Cover Crops
% A
do
pti
on
in
2012
Owned
Rented
Adoption of Conservation Practices in Ontario
0
10
20
30
40
50
60
70
Conservation Tillage Cover Crops
% A
do
pti
on
in
2012
Owned
Rented
Surprise?
2014/15 Interview Results
• 59 surveys
• 24 York, 19 Durham, 10 Simcoe, 4 Kawartha Lakes, and
2 Peel
• 41 stipulations received by 22 tenants
Crop Fertilizer/Manure Herbicide Tillage Drainag
e
Pesticid
e Total
Selectio
n
Cover
crop Rotation Quantity Type Timing Quantity Type
Minimum
tillage
Tile
drainage Type
19 4 1 3 2 1 3 2 3 2 1 41
Tenants’ Opinions of Why Landlords Stipulate Landlords require tenants
to avoid planting hay,
which produces a habitat
for bobolink.
0
2
4
6
8
10
12
Protectdevelopment
potential
Environmentalconcerns
Erosion control Lifestyle Combatexternality
Deter wildlife Preserve soilhealth and
fertility
Tenant'srecommendation
Raise rent
Summary
• Rental market is price competitive.
• In general foreign ownership appears to
be a very small percentage.
• Farmers more likely to treat rented land
like their own if renting for a longer period
of time.
• Anecdotal evidence that some landlords
development interests may be inconsistent
with policy in urbanizing areas.
Land Rental Agreements & The Environment
Bruce Kelly, Farm & Food Care
Environmental Program Manager
#FarmSmart16 @FarmFoodCareON
Who is Farm & Food Care Ontario?
• First coalition of its kind, whole sector approach – all types of farmers and associated businesses working together.
• Funded by members, sponsors, projects.
• Common goal – building public trust in food and farming
1) Have a written lease;
2) Have it be a long term lease;
3) Have environmental clauses in the lease.
Opportunities to Improve Soil Quality on Rented Land
A Written Lease
• Legal Names
• Property description (Lot, Conc)
• Length of rental term
• Rental rate (or formula)
• Date of payment
• Date and Signatures
Only a year?
A LOT CAN HAPPEN IN A YEAR
A Long-Term Lease
• The longer a farmer has rented
land, the better it is cared for.
• 3- 5 year lease agreements
• Compensation clause in case of
early termination of lease?
• Offering renter the right of first
refusal?
What if?
• Soil testing
• Building organic matter
• Fertiliser use & timing
• Crops & crop rotation
• Tillage practices
• Stipulate practices not results, due to unpredictability
Every year the owner and renter discussed cropping practices?
Stipulations
• To maintain a crop rotation of corn-soybeans-winter wheat with no-till following the beans and corn. Minimal till after wheat harvest to prepare soil for planting cover crop (radish, oats, peas).
Stipulations
• To apply supplemental manure to fields meeting rates within soil/crop nutrient needs.
• Liquid manure must be applied along with soil disturbance or injected
• All applied manure must be incorporated within 24 hours
• Manure may not be applied to frozen ground or to land where it may flow overland into a watercourse prior to incorporation
One landowner agreed that the year his field was rotated in hay, the rental rate would be reduced by 20%.
- M. Carolan
• Had been outbid by opportunist farmer • 3-4 years of cabbage ruined the Fox sand • No one else would rent it after that • Landowner paid him to rehabilitate field • Put to hay with manure for a few years • Renting it ever since
Larry Davis Brant County OFA Director
FARMER STORIES
• 15th bid on a neighbour’s 100 acres
• Made his pitch with a Power Point presentation in their living room
• Photos of no-till & cover crops building soil on his farm
• Struck a chord with them & didn’t even discuss the rental rate
• Later started share cropping
FARMER STORIES
Mike Strang Huron County IFAO Director
Opportunities to Improve Soil Quality on Rented Land
1) Have a written, longer term lease;
2) Consider environmental clauses in the lease
3) As a minimum: have an annual discussion about • Agronomic Practices • Fertiliser use & timing • Crops & crop rotation, Tillage practices
ELMWOOD March 1 BRODHAGEN March 2 DELHI March 3 PARKHILL March 8 THAMESVILLE March 9 LEAMINGTON March 10
9:30-3:30 Includes lunch
Building soil health Erosion control
Local farmer experience Cost-share information
FREE SOIL WORKSHOP
Space is limited. Register online by February 26th www.farmfoodcare.org/events
Thank you!
www.FarmFoodcare.org www.RealDirtonFarming.ca
Want to contribute your story?
Bruce Kelly [email protected]
Mel Luymes [email protected]