Friday, May 4, 2018

Rents are cheap for most expensive farmland

The most expensive farmland in Ontario is in Peel Region, on the doorstep of Toronto.

The lowest farmland rental rates are also in Peel Region.

How can that be?

Political subsidies is the answer – specifically the property tax break on farmland.

There is a chart, by county and region, in the most recent issue of “research” magazine from the University of Guelph, showing the results of a survey to discover farmland prices and rental rates.

The midpoint- or median – farmland price for Peel Region was $50,000 per acre and the median rental rate was $50 an acre.

Only the rents in Hastings, at $25 an acre, were lower, but there farmland prices were also the lowest in the province at $3,000 per acre.

Developers and speculators who have bought farmland obviously want the property tax break, so they offer farmers an incentive to rent their fields.

It’s not all easy going for the farmers who have to contend with lots of traffic, with nearby neighbourhoods whose teens and others can damage crops and scatter trash or even grow pot in a stand of corn.

So, move out to Huron County where the neighbourhood is decidedly more rural. The median land price is $14,000 an acre and the median rental rate $250 an acre.

Perth County must be home to more aggressive farmers because the median farmland price there is $18,400 and the median rental rate $300 an acre.

Of course, with a median, half of the farmers are paying more than those prices and rental rates and half are paying less.

So what would happen if there were no property tax break? And what would happen if there were no political subsidies for farming, including supply management?

I don’t think we’ll ever know.