Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 19 - Evidence - Meeting of November 22, 2016
OTTAWA, Tuesday, November 22, 2016
The Standing Senate Committee on Agriculture and Forestry met this day at 6:55 p.m. to continue its study on the acquisition of farmland in Canada and its potential impact on the farming sector.
Senator Ghislain Maltais (Chair) in the chair.
[Translation]
The Chair: I would like to welcome our guests, Ms. Lalancette and Mr. Pagé.
This evening, we are continuing our study on the acquisition of farmland in Canada and its potential impact on the farming sector. I would like to apologize to our witnesses for starting late; the Senate has just adjourned.
[English]
Before beginning, I will ask the senators to introduce themselves, beginning with the deputy chair of the committee.
Senator Mercer: Senator Terry Mercer from Nova Scotia.
Senator Merchant: Pana Merchant from Saskatchewan.
[Translation]
Senator Tardif: Good evening. Claudette Tardif from Alberta.
[English]
Senator Beyak: Hi. My name is Senator Lynn Beyak from Ontario. Welcome, and sorry we're late.
[Translation]
Senator Dagenais: Good evening. Jean-Guy Dagenais, senator from Quebec.
The Chair: This evening, we are very privileged to welcome representatives from the Fédération de la relève agricole du Quebec. Michèle Lalancette, who is from Lac-Saint-Jean, is President of the federation, and Philippe Pagé, from the Eastern Townships, is Inter-Regional Coordinator - South.
Allow me to introduce Senator Gagné, from Manitoba, who is joining us. Parliament is far away from the Victoria Building. The senators will be arriving shortly, and we will introduce them as they do so.
We will begin by hearing from Ms. Lalancette. I want to remind you that we have a little more than an hour. The Senators are eager to hear from you. Once again, welcome to the committee. You have the floor, Ms. Lalancette.
Michèle Lalancette, President, Fédération de la relève agricole du Québecc: Thank you, Mr. Chair, for choosing the land acquisition issue as your committee's subject of study. We will be talking to you about land grabbing. That is the term we have decided to use in Quebec.
Thank you for inviting us to appear. It is a pleasure for us to be here today to share with you the way we view the issue and to testify about what we have experienced in our region in recent years.
I have taken over a dairy farm in Saguenay-Lac-Saint-Jean, more specifically in Hébertville-Station. I am the mother of two beautiful children and have been President of the Fédération de la relève agricole du Québec since last March. Philippe Pagé, who is here with me, is responsible for policy issues at the Fédération de la relève agricole du Québec, and he grew up on a hog farm in the Eastern Townships.
The Fédération de la relève agricole du Québec is an organization of young people 16 to 39 years of age who are interested in agriculture. We represent nearly 2,000 members across Quebec. Our organization includes 13 regional unions that have local subdivisions and operate at the level of our regional county municipalities in Quebec. The federation strives to be the place where young farmers passionately interested in agriculture can meet and talk, but it also aims to be the communication channel between the aspirations of the new generation of farmers and sectoral decision-makers.
Our mission is to promote the interests of new farmers and to improve the conditions in which they set up operations, whether it be in transferring or starting up a farm. It is also to inform young farmers about the programs that are offered to them and to attract the new generation to agriculture.
The subject before us this evening has been a topic of current interest to new farmers in Quebec in the past few years. We recently sent you a paper entitled Les aspirations de la relève agricole du Québec, in which we address the subject. That document is based on a survey conducted of 750 young people that confirmed what we were thinking. It contains findings that we made based on the survey. In it, we also refer to the brief we submitted to the provincial Commissionon Agriculture, Fisheries, Energy and Natural Resources last year. We will be relying on that document during our presentation.
We will not be discussing figures in detail because we know our colleagues from the UPA did that last week. Instead we will provide testimony on what is going on in the field and on the ground, and we will talk to you about the consequences for young people in particular.
Farmland grabbing is a phenomenon that can be observed worldwide. The 2008 financial crisis and subsequent recession resulted in food insecurity and triggered a flight to the safe investments that farmland represents for investors and pension fund managers.
In Quebec, of course, we are not dealing with the same type of land grabbing as is taking place in Africa. I will be talking about Quebec because that is what I know. However, the result is the same: ultimately, producers will no longer own their farming assets, but rather foreign interests. I am not talking about other countries, but about other functions.
Quebec has not entirely escaped this wave of land speculation, and new farmers today are feeling its adverse effects. The socioeconomic fabric of rural communities is gradually deteriorating as major financial players move in and impose their laws. This is a form of unfair competition against young people, who cannot compete on equal terms for access to the land.
Based on our analysis of agricultural financing and land grabbing, we feel the situation is now critical. Quebec farming businesses shut down every day, and this is a continuous shockwave for new farmers. According to the Financière agricole du Québec, average land values increased by a factor of six from 1990 to 2013.
The Fédération de la relève agricole du Québec views the farmland grabbing phenomenon in Quebec more broadly as the acquisition of significant amounts of farmland by various players for a specific objective not necessarily compatible with the needs and interests of most farm producers.
The acquisition by investment funds of large parcels of farmland is the type of land grabbing that receives the most media coverage, but we also look at the kind of land grabbing practised by land developers, large landowners, and even agricultural producers.
The common characteristic of these various types of land grabbing is that they make it even more difficult for new farmers to access the land. On the whole, new farmers in Quebec are helplessly witnessing a growing gap between the market value of farm businesses based on asset values and their productive value based on farm revenues.
This situation, together with increased indebtedness, makes it increasingly difficult for a young person to acquire a farm. This gap is a major obstacle for young people trying their hand at farming. They must present a rigorously structured financial package, and the burden is also on them to show that they have the financial wherewithal to build or rebuild a business and that that business will be profitable enough to establish itself in a market dominated by increasingly large players.
I often cite what happened to me as an example. As I told you earlier, I own a small farm, not a very big one, situated on a nice plain with beautiful farmland and a village nearby. As there is a lot of farming in my area, not much land is available. There was a piece of land adjacent to ours, not of very high quality, but it was good to have an available piece of land situated close to ours.
For example, if I had wanted to expand my stable, I would have needed that land because it was adjacent to mine. I cannot expand on that side right now, and I will have to do it on the other side. It was clear to us that we would ultimately acquire that land later on. It was our plan to buy it so we could set ourselves up.
The land was sold while I was still a CEGEP student. I was studying so I could take over the farm. At the time, we did not really know how we would develop the land, so we asked the producer who had bought it to notify us when he was prepared to sell so we could assess the situation. However, that moment never came because, before he had even considered selling his land, someone offered him three and a half times the price he had paid, something we could never have done. Why? Because, before I could pay that kind of amount, I would have to go to the bank with my file and prove I could produce enough on the land to pay a price three times its value. That cannot be done in agronomy.
The person who got there first us was the Banque Nationale, with its investment fund. That year, it bought up more than 5,000 hectares in our region. It is already hard enough to compete with these people, but it is especially so now they are market players. When a producer wants to sell his land, he will call those people first or else wait until that kind of buyer shows up at some point to buy it. The Banque Nationale has withdrawn in favour of other companies, but the fact remains that, if a producer is ready to sell and a new farmer calls, the producer could claim the Pangea company has made him an offer. That may not be true, but, since they are in the market and are able to pay high prices, people use that tactic.
You see how far this can go. I definitely cannot buy the land situated next to mine now. My neighbour on the other side also wants to sell his land for three times the price and will accept nothing less. That is my story, but it is also that of many other new farmers I have met in my region.
In short, this land grabbing phenomenon is hurting new farmers in many ways. People often talk about the Pangea concept because it has been very much in the media, but most of these companies buy large pieces of land and then lease them to producers to grow crops.
We often notice that these people produce only a single crop. These days you find soybeans everywhere in my region. There used to be hay, canola, linseed, and grains, but now there are large fields of soybeans. We are losing crop diversity as a result. We are also losing people in the area. Going back to the Pangea model, one of their entities owns 2,500 acres of land. I have roughly 100. Consequently, you can put some 10 farms comparable to mine on 2,500 acres. That means 10 fewer families because they have bought the land of each family. Perhaps there are only five fewer, whereas they could have set up 10 on the same area of land. That means fewer families on our ranges and in our communities, and fewer families to supply our schools, our small grocery stores and our local businesses; in short, fewer people buying local products.
In addition to covering a large area of land where people could settle, these firms often buy jointly, but that is not necessarily the case in the region, and they will not necessarily encourage our dealers. Ultimately, all producers in the region will lose services. Some dealers now have only one central service point. That results in rural devitalization.
The Chair: Madame, allow me to introduce Senator Oh, from Ontario, who has just joined us.
Ms. Lalancette: Lastly, farmland grabbing disrupts the model that Quebecers follow, the family farm model. In 2007, the briefs submitted to the Commission on the Future of Quebec's Agriculture and Agrifood, chaired by Mr. Pronovost, revealed the consensus view that we collectively want operators to continue owning their farms. However, as new entrepreneurs move quietly toward the status of salaried employees and tenants on the lands they work, we have embraced a reverse logic.
Furthermore, we are dealing with a model that does not create collective wealth or ensure the sustainable establishment of a dynamic new generation of farmers. One thing is certain: the new generation of agricultural producers wants to remain masters of their assets, decisions, and future. We feel this desire is fundamentally legitimate.
The Chair: Mr. Pagé, do you wish to add something?
Philippe Pagé, Inter-Regional Coordinator - South, Fédération de la relève agricole du Québec: I would like to add some potential solutions that we have considered, but Ms. Lalancette may also continue on this subject.
[English]
Senator Mercer: Thank you both for being here. We appreciate your patience in waiting for us this evening.
You have described some problems that are not unique to Quebec. What I haven't heard is any solutions that the province has been involved with in anticipating the need for younger people to get into the farming business.
I have one specific question. Banque Nationale purchased, if I heard you correctly, 5,000 hectares or maybe more. What are they doing with the land? What is the advantage for them, other than perhaps if they were doing urban development? I suspect in some parts of rural Quebec urban development is not top on their list.
[Translation]
Ms. Lalancette: The bank transferred its land assets to a corporation that is now called Pangea. The purpose of these financiers is merely to acquire a safe investment that will not lose its value. Historically, farmland has always increased in value by six per cent annually. Consequently, they are assured that they will not lose money and will earn a six per cent yield on their investments. The idea is to own a safe portfolio.
[English]
Senator Mercer: So they buy the land. They anticipate making about 6 per cent profit, and they are growing crops that are not necessarily the traditional crops of your region. Of course, that sort of upsets the balance of agricultural production in the region.
Is no one other than the bank buying the land? Is it just the bank? Then they are transferred to —
[Translation]
Ms. Lalancette: No, a lot of business owners invest their money this way. We also saw this in the forestry sector a few years ago. It may be less widespread right now, but these are big financial interests that are setting up their pension funds. The banks use them as retirement investment funds, and major owners want to invest their money safely.
Mr. Pagé: I would like to note that it is impossible to lose money by buying land today. It is a safe and effective way to invest money, and, as Michèle mentioned, land values have increased by a factor of six in the space of approximately 15 years. It is therefore extremely advantageous for these funds to invest in land, ultimately without having to use it.
Ms. Lalancette: In fact, they are certain to profit from it, even if they do not cultivate it. They cultivate it as a matter of principle.
[English]
Senator Mercer: There is an ongoing discussion about food security, "security'' meaning the accessibility of locally produced products as opposed to imported products. We're spoiled in this country. We can't produce all the food we eat because of our climate, et cetera, but we have never, in our lifetime, the people sitting around this table, had to do without. Our parents did, but we haven't.
Is there no discussion at all going on in Quebec about food security and about Quebecers being able to feed themselves?
[Translation]
Ms. Lalancette: People are discussing it. With the Commission on Agriculture, Fisheries, Energy and Natural Resources, we hoped that these issues would emerge from the discussions, but we were greatly disappointed because the only idea retained was that a registry of property transactions should be established to determine who the players were. As you saw, the UPA prepared a list of the major moneyed interests and submitted it to you last week. There are 10 or so businesses and major owners purchasing an enormous amount of land. We could solve a large part of the problem by dealing with those 10 businesses.
First, the registry was proposed as a way to monitor transactions. It seems, from speaking to the UPA people and those compiling the data, that you have to be clever when looking for information, which is concealed everywhere. Second, we wanted to have a mechanism for monitoring property markets. I do not know whether you have heard about the system in France. Since they have experienced food shortages, the French know that what little farmland they have left is important.
In Canada, we are fortunate in that we have never run short of food. However, we must be careful because Quebec farmland represents only two per cent of all our land. We should put in place a mechanism whereby an organization could offer land for sale in order of priority: first, to new farmers, then to sectoral producers, then all producers who might be interested, and, lastly, to anyone wishing to invest in land. There would therefore be three levels to go through before coming to investors. This is something we find appealing, particularly since Quebec has the Commission de protection du territoire agricole du Quebec, the CPTAQ, an organization that could play that role. In this way, we would not have to build something new.
We could also establish a land bank, like as that of Brome—Missisquoi. A dozen RCMs in Quebec have established this kind of mechanism, in which landowners are in touch with young new farmers who want to start up or consolidate a farm.
We in Quebec are currently working with the Department of Agriculture, Fisheries and Food, the Centre of Social Innovation in Agriculture, and the Quebec Reference Centre for Agriculture and Agri-food to create a service to enable these people and new farmers to meet. This is one of the things we want to put in place.
Senator Dagenais: Thank you for your presentation and for your courage. It is reassuring to see there is a new generation of farmers. I had a number of questions for you, but you answered some of them, specifically the one concerning the giant companies that are buying up land. You obviously have no guarantee they will always use the land for agricultural purposes. How have governments failed in their duty to protect farming families? We know about the Union des producteurs agricoles. I imagine you are in touch with it.
My question concerns funding sources. I believe I understood that it is easy for large businesses to find financing. You mentioned Banque Nationale, but it seems more complicated for young farmers, and I do not know why.
Ms. Lalancette: The difference with the investment fund is that it uses money that it has at its disposal and invests it. It is like going to buy candy at the convenience store. You take money out of your pocket and you pay for your candy. A producer does not have $2 million in his pocket. He must prove to the financial institution that the purchase will be profitable so that there will be a return on the money he invests, beyond the interest he must pay on the loan.
For a person who wants to invest, it is like buying land with an RRSP. You have money, and you do not want to lose the interest you make. Ultimately, the investment fund is simply using your collective RRSPs to buy land.
Senator Dagenais: You mentioned banks that lease the land. They often try to lease it for production purposes, even though, in some instances, it is not used for farming. Are these people making money by leasing land? Are they making more money than you?
Ms. Lalancette: That depends on the situation. The Pangea model was condemned because producers working on the land became Pangea employees and were no longer entrepreneurs. They say they make all the decisions, but is this the model we really want?
Furthermore, many people wonder why we do not draft good lease agreements because, if we talk about food security one of these days, who do we want to see controlling that land? Today it is still Quebecers. We hope that will be the case for a long time. At some point, however, when these people want to resell their land and recover their assets, it will not be producers who buy it. They will not be able to pay the price.
Yes, this is a wheel that is turning and that will not stop. There is such a big difference in market value, in addition to the fact that land values are calculated on the basis of unrelated transactions conducted during the year.
When my father sells me his land, he will not sell it to me at the same price the Banque Nationale paid at the time or at the price Pangea can pay right now. He will bequeath it to me in large part because these are net asset values. My father will sell it to me at the transaction price, but the land will not be recorded at that price. Furthermore, we will be taxed on that value. There are a lot of factors such as this that make this absurd.
Senator Dagenais: Thank you very much for your answers, Ms. Lalancette and Mr. Pagé.
The Chair: Just before turning the floor over to Senator Tardif, there is an old saying that goes like this: "Everyone to his trade and all will go well.'' I do not believe the banks will one day grow carrots, turnips, and cabbages. They will continue counting money and unfortunately will not give us the same return on our RRSPs as the return they get on their loans. There is a return on acquired land, and that creates a disproportion. I will come back to this later.
Senator Tardif: Thank you very much for being here this evening, and especially for your personal testimony, which helps us form a clearer understanding of the effects of farmland grabbing.
You mentioned a few potential solutions, and I thought I understood that a bill had been tabled in the National Assembly last May, a bill that you supported. It was the Anti-Farmland Grabbing Act. What was that bill about? Would it be a good solution to remedy the problem?
Ms. Lalancette: In fact, the purpose of that bill was to limit purchases that someone might make to 100 hectares a year. We are talking about someone. If he owns two businesses, the two businesses are counted together.
We requested that last year in order to put a quick stop to the phenomenon so we could find a permanent way to solve the problem, but the act of simply halting land purchases was a provisional solution. I told you about Banque Nationale, which is no longer in the picture and is associated with Pangea, but there are corporations and other names of businesses like those that the UPA cited to you last week. Those people have continued buying.
Senator Tardif: Does this bill prevent non-residents from buying?
Ms. Lalancette: This act, which prevents non-residents from buying, is already in force in Quebec. It prevents non- Canadians from buying. Someone from Alberta could buy land that he has never seen in Lac-Saint-Jean.
Senator Tardif: So I could not buy land.
Ms. Lalancette: In fact, you could. People were initially afraid the Chinese would come and buy land, as is the case in France. In Quebec, we are told that we have an act that absolutely prevents this phenomenon and that it is impossible to do this. I personally know of no act that is entirely loophole-free. I am sure that people with the resources and lawyers can get around these obstacles. If they really want to buy land in Quebec, they will ultimately do so.
Our main problem for the moment is not foreigners coming to buy land, even though attempts have no doubt been made to do so; it is investors.
Mr. Pagé: Bill 599, to which you referred, limited the area of land that could be bought by a single entity to 100 hectares to restrict the practice until a permanent solution could be found. What the bill proposed was to put this land purchase control mechanism in the hands of the Commission de protection du territoire agricole du Québec to encourage further thinking on the matter of the limit that should be put on the number of hectares of land that people could purchase with impunity. Is it written in the Constitution that someone can own all the land he wants and can buy? Perhaps a limit should be set somewhere. The bill at least made it possible to study the phenomenon over a certain period of time. The problem is that the bill was tabled by the opposition and had virtually no chance of being passed by the present government.
Senator Gagné: Bravo for your testimony. I am pleased to see that there is a next generation and that you are taking steps to promote your interests and to guarantee protection of your land. I think this is really a good initiative. Bravo!
I would like to go back to the question of farmland financing. I imagine that you, as a young buyer, have access to certain financing programs. I know that Farm Credit Canada offers some tools, such as the Young Farmer Loan. Are there any other tools? Does that help you enter the market? Are new farmers taking advantage of these programs?
Ms. Lalancette: I have always said that we in Quebec are quite spoiled for new farmer programs. For example, we have start-up assistance, which is associated with training. The amount granted may be as much as $50,000 per new farmer. We also have the Fonds d'investissement pour la relève agricole, or FIRA. The FTQ's Fonds de solidarité and the Government of Quebec joined forces to create this $75 million fund, which is available and provides certain benefits to new farmers. Young farmers can take out loans and lease land with an option to purchase. At the end of a 15-year term, they may then decide to purchase the property or leave it for another new farmer.
I encourage you to look at how this works. This is a very interesting tool for Quebec, especially for unrelated members of the new generation of farmers. It is the kind of thing that can help a young person get ahead. I have spoken to the people who manage the fund. For example, a young person can call and make an offer for the land he or she wishes to buy, and FIRA will support that offer.
Furthermore, in many cases, dealings take place in secret. For example, I never knew the land next door to me was for sale. I probably would have been unable to offer the purchase price, but I would at least have made an offer. However, I did not learn about it until the land was sold.
Senator Gagné: Land values have increased by a factor of six in the past 10 or 15 years. We know very well that, for some farmers, the land becomes their pension fund. It is a vicious circle. People put their lives into it. They want to retire and sell their land at a good price so they can move on.
I would like you to tell me about land transfers within families. How does that work? Are you satisfied with the way land is passed on within families?
Ms. Lalancette: The process differs greatly from one family to the next. I see all kinds. Generally, when family relations are good, everything goes well. People work for the next generation. However, we must educate people to show young farmers how to plan for their retirement and their exit because it is important and it greatly facilitates matters. However, it can take 10 years or so to complete a transfer. People have to prepare for their exit as well as for a takeover. We have provided a great deal of information and training on the subject, but much work remains to be done.
In general, the process goes well for people who follow the steps we teach or recommend. However, there is always the human factor. I have seen parents demand market value as a condition for agreeing to sell to the next generation. At the other extreme, I have seen people give everything away for nearly nothing, which is hardly any better. In many cases, it is the survival of the business that is important for the family. In those instances, all parties lower their demands to ensure the business survives. In either case, if the transfer is not made, the result is often that the business is dismantled.
The Chair: Ms. Lalancette, I am going to take the liberty of asking a few questions. I know your region well. I come from the Côte-Nord. It is not necessarily a very agricultural region, but our neighbour is Saguenay-Lac-Saint-Jean, which is a major supplier for us.
I was intrigued by something you said at the start of your remarks. I am familiar with the situation because I have visited the region. I also know Iberville well, having travelled around it. It is monoculture that troubles me. Your region was and is still known for its cheeses. I am thinking of the Fromagerie Perron, in Saint-Félicien, and several other marvellous small cheesemakers.
This monoculture troubles me. The bank will not be making cheese. I have never seen a bank manager dip his hands into milk. This issue concerns me because we are going to lose what we call our Quebec heritage. Having sat in another parliament before coming here, I thought the Commission de la protection du territoire agricole also protected that heritage. However, it appears from what you just said that there are enormous deficiencies in the act.
Is it not time for Quebec's Minister of Agriculture to get involved and to amend that act to protect our agricultural heritage? If everyone grows soybeans, we are going to lose cheese, corn, cabbage, carrots, and turnips. We will not achieve food security that way. It is not enough to have enormous fields of cranberries. We do not eat them three times a day. Other basic factors are needed. For example, the Saint-Bruno abattoir, which shut down, represents an enormous loss to the region, particularly for the people who work on its dairy farms because cows have calves. The bank may not know that, but I do.
Ms. Lalancette: We no longer have any abattoirs in Saint-Jean because everything is leaving the region.
The Chair: That is unbelievable.
Ms. Lalancette: We have also lost nearly all sheep production in the region, and there is virtually none left. In the case of small farms, there were rabbit farms and so on, but nothing is being done any more in the region.
The Chair: That was one of the few cattle farms on the Côte-Nord, but the abattoir shut down, and now there are blueberries.
We have met many people in Canada, from Vancouver to Saint John. They in fact have virtually the same problems when it comes to farm transfers. One question intrigues me, and it may be the question for the future. It is not easy for young people like you to get started today. I had occasion to meet the two major federations of credit unions in Canada, those of Quebec and of Ontario. To my great surprise, 47 per cent of their investments in Ontario are in agriculture, not just in farms, but also in equipment, tractors and everything related to farming. In Quebec, is the Financière agricole in direct contact with producers and people like you?
Mr. Pagé: It would be hard to state it in black and white since there is both little contact and a great deal of contact. It is also different in every region. I would say we have unfortunately drifted apart in recent years.
The Chair: When the Financière agricole was founded, if my memory serves me, it was to assist you and not to distance itself from farmers. It is you who feed the Canadian people and the Quebec people, and we will not be able to do anything if we move apart.
Ms. Lalancette: I can assure you we ask ourselves the same question.
The Chair: Coming back to land acquisition, this is a major problem in both Quebec and Canada as a whole. We were surprised to learn from people from British Columbia that, for the purchase of land by developers to count — for example, if they bought 10 acres of land to build residences, single-family homes, or a shopping centre — they were required to clear 10 acres somewhere else. We sense that agriculture is receding somewhat around the crown of Montreal because the population must be housed somewhere. Do you think this model or a similar model might be applicable to Quebec?
Ms. Lalancette: If I tell you we are going to clear 10 acres on the Côte-Nord —
The Chair: That is not good, but it is good for blueberries.
Ms. Lalancette: That is in a way what I would say to you. The best garden land in Quebec is in the area around Montreal. It is terribly expensive, not just monetarily, but also in terms of agricultural value as well because it is productive land for vegetable gardens. I cannot do the same thing in the far north or even in northern Mauricie or in Abitibi. You cannot create vegetable gardens there because we do not have the same type of soil or the same conditions. You can grow a lot of other beautiful things, such as blueberries, but, at some point, it will not be better if you just grow blueberries in Quebec. As was said earlier, that will not do much to improve food security.
[English]
Senator Mercer: I was curious about the other players. This is one of the first times that we have heard about people purchasing farmland as an investment and anticipating making their money back over a short period of time, other than when doing that for commercial property or real estate in bigger communities. If you go northwest of Toronto, you see some of the best farmland in Ontario, which is now covered with subdivisions, but you don't seem to be saying that.
I find this curious. Is there no sign of development other than just the return on the resale of the land? Is that the only way they are making their money?
[Translation]
Ms. Lalancette: Not necessarily. Just look at book value. For them, it is quite simply an asset that has a book value. They do not expect to sell in 5 or 10 years. They keep it in their portfolio for at least 50 or 60 years. If these people do not need money, this is not troubling in the short term, except that they often practise monoculture, and that brings fewer people to our part of the country. Otherwise, if they want to sell in 50 or 60 years, or if something major happens and they need capital quickly, to whom will they sell that land?
[English]
Senator Mercer: You're a dairy farmer, and dairy farmers are part of the supply management system. In this environment, as a small farm can you survive in supply management in a community with these high land prices?
[Translation]
Ms. Lalancette: Survive, without investing, probably. I am lucky because the farm at home is not indebted, but I definitely cannot expand. I am considering the possibility of switching to organic farming. My fear is that, since you produce less per animal in organic farming, you need more hay and therefore more land. That is the challenge I must address, and I have to get my calculations right.
[English]
Senator Mercer: How many animals do you have?
[Translation]
Ms. Lalancette: We have about 70 head, including 28 lactating cows. It is a very small operation.
[English]
Senator Oh: Normally for a pension fund to buy lands, you have to have a return every year because they are not builders. Are they not leasing out to young farmers like you or to other farmers to farm the land? Because they can't sit there for six, seven, ten years to wait to sell and make a profit. It isn't justified.
[Translation]
Ms. Lalancette: They lease it, of course. However, perhaps you were not here when we said it, but what young people want is to own their land. Earlier we cited the example of France. Back in the time of the feudal system, the land never belonged to the producers as such. Now it is not the value of the land that is a problem; it is the right to produce on that land. In fact, it is the leases that are worth a lot of money. We will ultimately revert to the same problem. As I said earlier, it is good to help producers produce, but if a conflict arises tomorrow morning, and we have to produce in order to feed our country, then we will probably have to talk to those people. They will own large tracts of land, and they will charge us a high price to feed ourselves.
That may sound alarmist, but that is the kind of thing you have to think about in the long term. Furthermore, if you have several producers, they will be able to feed themselves and their neighbours.
I went to France in 2009 and met a producer who had never met the owners of the land he had been cultivating for 30 years. He told us, "They have never seen their land, and I have never seen them.'' If a conflict or an extreme situation arose tomorrow morning, or if those people decided to come and cultivate their land, they might decide to turn the farmer out, even if they had a binding lease. Yes, there is some assurance, but nothing is ever guaranteed.
The Chair: A wise man said, "The land belongs to he who tills it.''
Senator Dagenais: You mentioned France and the assistance measures available there. Would you explain to us briefly what is being done to help farmers in France?
Ms. Lalancette: In fact, there is a mechanism in France that we do not wish to copy, because France is not dealing with the same problems. It is ultimately a mechanism whereby, when land is for sale and comes onto the market, the organization takes charge of it, negotiates the price with the farmer, and offers it to new farmers on a priority basis.
As I said earlier, a large part of the problem is that we do not know the land is for sale. The organization comes in with an offer equal to three times the value of the land. My neighbour could never have refused. That transaction saved the rest of his business. I cannot hold it against him. You are offered three times the price, and then you have 15 minutes to decide, or else the offer is withdrawn. He did not have the time to call and tell me he had received an offer or to ask me whether I could match it. You have to respond immediately.
This is ultimately like a regulatory mechanism whereby, when a piece of land is for sale, a check is done to determine whether a new farmer is interested. If so, the transaction is conducted with the new farmer based on pre-established prices. I do not know whether it works the same way everywhere, but it would be good to rely on this principle to make the land available for people on a priority basis.
Here again, there may be certain mechanisms because this can scare farmers who realize they can no longer agree with their neighbours on the purchase. There are mechanisms whereby transactions that are conducted by mutual consent between farmers do not go through the system. However, a farmer who might have no heir, for example, could go through that system.
The Chair: Pardon me, Ms. Lalancette, but you say you have a small farm.
Ms. Lalancette: I have a beautiful farm.
The Chair: It is people like you that own small farms across the country who deserve to cultivate the land, not the speculators. Our committee toured Canada, and your testimony is extremely important for us because the speculators bring nothing to the table except money, and you cannot eat money. It is people like you who live off their small farms and who build, bring vitality to the villages, and support the corner grocery store, the school, pharmacy, and the farm equipment dealer. You are the very core of the vitality of your region of Quebec and Canada.
We have met people from everywhere, young people, because the Senate Committee on Agriculture and Forestry wanted to meet those who are directly concerned, not the big financiers, the major unions. They are good people — bravo! — but they do not cultivate the land, and it is the people who cultivate it that we must listen to.
That is why our committee will be preparing a report, and people like you will appear in that report. The report will be forwarded to the government, which will be required to give us a reply as to what it intends to do. Both the future of your region and that of the entire country are at stake.
I congratulate you and encourage you to fight speculation. There are people around this table who will always be ready to defend you against speculation. It is important for people like you to flourish freely, grow and bequeath to their children and grandchildren well-tended land from which they can live.
Thank you very much for being with us because our discussions have been highly profitable. Mr. Pagé and Ms. Lalancette, I thank you for your testimony and wish you a safe return home.
(The committee adjourned.)