Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 23 - Evidence - Meeting of February 16, 2017
OTTAWA, Thursday, February 16, 2016
The Standing Senate Committee on Agriculture and Forestry met this day at 8:01 a.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: Welcome to the Standing Senate Committee on Agriculture and Forestry. Today, the committee is continuing its study on the acquisition of farmland in Canada and its potential impact on the farming sector.
[English]
My name is Senator Ghislain Maltais from Quebec. I am the chair of the committee.
I invite senators to introduce themselves, beginning with the co-chair.
Senator Mercer: Terry Mercer from Nova Scotia.
Senator Beyak: Lynn Beyak from Ontario. Welcome.
[Translation]
Senator Tardif: Good morning. I am Claudette Tardif from Alberta.
[English]
Senator Bernard: Senator Bernard from Nova Scotia.
Senator Enverga: Tobias Enverga from Ontario.
[Translation]
Senator Gagné: Good morning. I am Raymonde Gagné from Manitoba.
Senator Pratte: I am André Pratte from Quebec.
Senator Dagenais: Good morning. I am Jean-Guy Dagenais from Quebec.
[English]
Senator Ogilvie: Kelvin Ogilvie, Nova Scotia.
[Translation]
The Chair: Joining us this morning is Brian T. Gray, from Agriculture and Agri-Food Canada.
[English]
He is the Assistant Deputy Minister, Science and Technology Branch. Mr. Allan Howard, Manager of the Agroclimate, Geomatics and Earth Observation Division, Science and Technology Branch; Mr. Ted Huffman, Research Scientist, Environmental Health, Science and Technology Branch; and Mr. David W. Lee, Manager, Canadian Soil Information Service, Science and Technology Branch.
[Translation]
Welcome gentlemen. My understanding is that Mr. Gray will start us off with his presentation.
Brian T. Gray, Assistant Deputy Minister, Science and Technology Branch, Agriculture and Agri-Food Canada: Honourable senators, I am Brian Gray, the Assistant Deputy Minister of the Science and Technology Branch at Agriculture and Agri-Food Canada.
I appreciate this opportunity to discuss the department's ongoing work on soil mapping and its use in agricultural land assessment, and the new techniques available to improve soil data analysis.
[English]
Agriculture and Agri-Food Canada's efforts in this area are directed toward helping the sector better address soil conservation issues. We do that through our research as well as coordination and delivery of soil, landscape and climatic data for all of Canada.
This data provides a base for studying the likely impact of climate change on agricultural production and helps us prepare the national inventory report on greenhouse gases as well as its reports on the impact of agriculture on soil, air and water quality.
Agriculture and Agri-Food Canada is also working with the provinces, universities and the private sector in Canada and with partners around the world to improve predictive soil mapping and advance the resolution of soil data by combining older data with new high resolution images to provide support for precision agriculture applications, as an example.
I have here with me today Mr. Allan Howard, Manager of Science Development and leader of our soil information team, and Mr. David Lee, Manager of the Canadian Soil Information Service, both of whom are part of the Agroclimate, Geomatics and Earth Observation Division. These two gentlemen are based in Regina.
Also we have Dr. Ted Huffman, a research scientist working on national agriculture land use, land use change and land management data based here in Ottawa.
I thank the chair and members of the committee for providing us with this opportunity to speak about this topic.
I will now turn it over to Mr. Allan Howard, who will provide information on the Agriculture and Agri-Food Canadian Soil Information Service and other land use information at Agriculture and Agri-Food Canada.
Allan Howard, Manager of the Agroclimate, Geomatics and Earth Observation Division, Science and Technology Branch, Agriculture and Agri-Food Canada: Good morning, Mr. Chair and members of the committee. I am Allan Howard, and I am here to provide more information about the Canadian Soil Information Service of Agriculture and Agri-Food Canada. For the remainder of my presentation, I will refer to this service as CanSIS.
This service makes publicly available through the Internet Canada's agricultural soil and land use data, including a variety of soil survey reports, maps and standards documents including the National Soil DataBase.
The National Soil DataBase is an electronic archive of soil, landscape and climate data from across Canada. Most of Agriculture and Agri-Food Canada's soil and agricultural land products are developed by using information from this database.
The Soil Landscapes of Canada, derived from the National Soil DataBase, is the only national soil map covering the entire agricultural region of Canada. This data was compiled from soil survey reports, aerial surveys and satellite data.
Each individual map unit in the Soil Landscapes of Canada covers anywhere from 10 to 50 farms. Figure 1 in your handout shows an example of the relative size of the units.
The Soil Landscapes of Canada support a wide variety of national environmental applications related to soil and water quality, greenhouse gases, land productivity and climate change. The Census of Agriculture data has also been linked to the soil data from the Soil Landscapes of Canada to provide information on how the land is used, for example crops grown and farming practices.
CanSIS also provides more detailed regional level maps called detailed soil surveys. They can be used to inform municipal land planning and environment related decisions such as development of local or regional land use plans, including zoning decisions. An example of the detail found in a regional level map is presented in figure 2.
Another information source available on CanSIS that could be used by municipal planners is the Canada Land Inventory. The Canada Land Inventory was conducted in the 1960s to produce a comprehensive land inventory of rural Canada for determining land capability for many types of land uses, including the soil capability for agriculture. The Canada Land Inventory is the tool used by many provinces for land use planning today.
Currently, Agriculture and Agri-Food Canada is developing a new approach to land quality evaluation, the land suitability rating system. The Canada Land Inventory and the land suitability rating system both use a seven-class rating system, where class 1 land offers the widest variety of agricultural crops in the country; classes 2 through 7 offer progressively fewer options; classes 4, 5 and 6 are considered marginal lands for agricultural production; and class 7 land is considered unsuitable for agriculture.
The new land suitability rating system is crop specific. It bases its ratings on soil, climate and landscape information requirements of the crop in question.
Figure 3 shows an example for spring seeded small grains such as wheat and barley in Alberta. Unlike the Canada Land Inventory it is driven by data including soil, landscape and climate data, rather than expert opinion. Therefore, we consider it more objective, repeatable and scalable.
While still under development and not yet publicly available, it has been used in research with climate change scenario models to predict agricultural suitability under a changing climate for mid-century.
The new farming technology advances such as precision farming are creating an increased demand for evidence- based decision making at finer and finer scales down to subfield levels beyond what is possible from the current soils database.
In order to address this need we have initiated discussions with the provinces, universities and private sectors about a common integrated approach to increase the resolution of our soils data.
Agriculture and Agri-Food Canada is currently conducting research to develop nationally consistent farm field level soil data using a new approach called predictive soil mapping. As seen in figure 4, predictive soil mapping integrates our existing soil data with improved terrain data to predict soil information. As a result more detailed soil maps can be created at significantly reduced costs over the traditional field survey-based approach.
Soil data only informs about the suitability of land for cropping purposes, not what is currently happening on the land base. Agriculture and Agri-Food Canada develops information on land use by using satellite imagery. Our land use maps with a spatial unit approximately the size of this room have an accuracy that is generally in the range of 85 to 90 per cent.
With this information we have produced both detailed annual crop inventory maps and global standard land use maps. Annual crop inventory maps help provide assessments of yield variability. These maps are a base for studying the likely impact of climate change on agricultural production.
Our analysis of the land use data indicates that some forest land and wetlands are converted to cropland every year. The majority of this conversion is taking place in the Prairie provinces.
The analysis of the land use and soils data indicates that farmland is being lost to urban expansion in Canada every year, with much of this occurring in Ontario, Quebec, Prince Edward Island and British Columbia where the majority of Canada's best farmland is found.
Based on the land capability ratings and land use information we are able to determine that the land being lost to urban uses is mainly prime agricultural land in classes 1, 2 and 3, whereas the new land coming into agriculture tends to be subject to more limitations for agriculture in classes 4 and 5.
In addition to being found on Agriculture and Agri-Food Canada's website, Canada's agricultural soil and land use data is also available through Canada's open data website. Figure 5 shows a picture of the CanSIS website.
In closing, I thank the chair and the members of the committee for providing me with this opportunity to talk to you today.
Senator Mercer: Mr. Howard, why the new approach? What has driven the department to come up with a new approach?
Mr. Howard: Technology is driving it. We have other sources of information such as satellite information which can get down to finer and finer resolutions. Therefore, decisions on the land — precision farming being another example — are getting to finer and finer resolutions. The soils data is not at the resolutions of other information. It is driving us to look at ways we can get that data to finer resolution so that more precise management decisions can be made on the land.
Senator Mercer: I salute you for doing this. As you get better at it you are more and more pointing out the fact that land being taken out of production is class 1 land as opposed to class 5, which wouldn't be missed as much in agriculture production.
I am constantly concerned about the year 2050, when there will be nine billion plus people on this planet. We will have to find a way to feed them. One way not to feed them is by taking class 1 land out of production. I understand what motivates people to use class 1 land because it's very attractive and because of its proximity.
Is any research happening today in terms of finding a way to improve the poorer class of land and change it into more productive land? We will need this land. Canada is one of the few countries in the world that can produce more arable land. We will be part of the solution to the problem in 2050. I hope we're not part of the problem.
Mr. Howard: I may just say there are many ways. I will turn this over to Dr. Gray because he could probably inform you about much of the research.
Mr. Gray: Within our research branch we have about 385 scientists who are conducting leading research projects. We are spread across four strategic objectives.
First is increasing productivity on all lands.
Second is being mindful of environmental impacts. We want to increase productivity but maintain or improve our environment.
The third objective is looking at the attributes of plants or animals we're dealing with. The attributes are generally done through plant breeding.
The fourth objective is addressing threats. We need to make sure, whether it's an insect, pest, virus or bacteria, that the plant and animal breeds we're developing are resilient to those threats.
We are mindful of 9 billion people by mid-century. We are looking at how to maximize our productivity on these less productive lands and doing so in a manner that is not harmful to the environment.
Senator Mercer: It is a very encouraging answer that you are mindful of the problem and that you're working on it. I wish I felt as confident that someone in the world is working collectively to solve the problem.
Are we alone in doing this, or are other agriculture departments around the world addressing the same issue?
Mr. Gray: We have a very good working relationship with the United States, USDA. We are working on six priorities with them, including genomics. These include plant breeding, pollinators and remote sensing, which we're talking about now.
There is also a broader group. You might be aware that a G20 agriculture ministerial happens every year. I can't remember exactly when it was, but about four or five years ago the ministers decided that there should be an annual meeting of the chief scientists of each agricultural department of the G20. It's called the meeting of agricultural chief scientists or MACS for short. That group gets together once a year.
We have had four years but it is still early days. We are identifying the biggest threats and opportunities facing the G20 countries in agriculture. We look not so much at pooling money and putting it in one basket but at collaborating on research where we are twinning funding. We are already working on it. We want to align our scientists with their scientists, whether in government or academia.
Senator Mercer: That is good news. You mentioned a discussion about pollinators. As you're probably aware this committee did an extensive study on the health of bees. I hope your researchers are aware of the study. It's one that has attracted and continues to attract a lot of attention to the workings of this committee.
If there are other topics that we should be paying attention to in the future, we would be happy to hear about them.
Mr. Gray: I am aware of your study. I believe one of our top scientists in bees, Dr. Stephen Pernal, was here speaking with you.
Senator Mercer: Yes, he did.
Mr. Gray: He is fantastic.
Senator Mercer: Yes.
Senator Pratte: I understand from your paragraphs on the use and loss of classes 1, 2 and 3 lands to urban uses that you can produce detailed data on these changes. Is that right?
Mr. Howard: That is correct. When monitoring it from space with satellite information our resolution is down to roughly the size of this room and 85 to 90 per cent of the time we are accurate.
Senator Pratte: One of the challenges we've had in this study is the lack of detailed data on the ownership of land, the loss of farmland, or changes in ownership of land to foreign owners or institutional investors.
We know there is data on ownership changes. Could we imagine a way of bringing together data from databases on ownership and your own data which is varied? It would be interesting to see if land use also changes when ownership changes. Would that be possible or much too complicated?
Mr. Howard: I will invite Dr. Huffman to reply. He has been researching land use.
Ted Huffman, Research Scientist, Environmental Health, Science and Technology Branch, Agriculture and Agri-Food Canada: It would be a very complex project to do that. You would have to integrate or bring the municipal land ownership or tax roll information into the earth observation realm. We determine the current land use from satellite imagery and land ownership is based on tax roll information and so on.
There are maps that show each. It's called cadastral information. It records the boundaries of each property. It's feasible to do such a study. It would be quite a large undertaking because of the size of the country.
Senator Pratte: And therefore very costly.
Mr. Huffman: Costly and a lot of people power to deal with each municipality across the country where the land records and the maps are held.
Senator Ogilvie: I will follow up in the direction Senator Pratte was going but I will be a little more basic with regard to the data you've provided today.
In principle, looking at the slides you provided, this seems to be an absolutely excellent database. However, I didn't bring my telescopic lens this morning. As much as I am trying to figure out, even in Oxford County, how things break down in terms of reality. Is this data available online?
Mr. Howard: It is. If you'd like some detail, Mr. Lee actually manages CanSIS and has access to that information. He would probably give you a more complete answer.
David W. Lee, Manager, Canadian Soil Information Service, Science and Technology Branch, Agriculture and Agri- Food Canada: We absolutely strive to make all of our data available online on the CanSIS website and on Canada's open data website. It's available to the public to make well-informed decisions.
Senator Ogilvie: Could you send the clerk the direct link rather than our searching through Google?
Mr. Lee: I would be honoured to do so.
Senator Ogilvie: Before I move to my second quick question, this is absolutely excellent, at least in appearance. We'll know more when we can actually look at the precise detail. In principle, this looks like excellent data and part of what we've been looking for throughout this study.
You mentioned, Mr. Howard, that much of the loss of good class A land to urban expansion occurs in four provinces. Do you have an idea of specific data, either the rate of change or an example of change, over a period of time from year to year? In other words, what is the magnitude of the loss on an annual basis? If you were to pick one out of the data you have on mind, P.E.I. would be one that I could relate to most quickly in terms of the significance of the numbers.
Mr. Howard: Again I will turn that question over to Dr. Huffman.
Mr. Huffman: That's a very complex question dealing with land use change. Land use change is a rare event in the national perspective. It happens at isolated locations here and there across the country, so monitoring it is quite a difficult task.
Over the last couple of years we brought the new technology of satellite imagery and geographic information systems to bear on that problem. We're now getting data. We have preliminary data between 1990 and 2010 that shows the rate of change of cropland to settlement and forest to cropland by province. It's preliminary data. We're currently in the process of validating it or trying to determine how accurate it is.
In Canada, we're looking at about 3,000 hectares per year of converting of cropland to settlement, to urban uses. In Prince Edward Island their contribution is 28 hectares per year of cropland going to urban settlement. In other places like Ontario it is 1,300 hectares and in British Columbia, 138 hectares. We have the numbers and we can identify specifically or regionally where they are occurring. Naturally it occurs around major centres and so on.
In our forest to cropland land use change we're looking at about 2,000 hectares per year being deforested and converted to agricultural use across the country. The major contributor is Alberta, 800 to about 900 hectares per year, followed by Quebec at about 400 hectares per year and Saskatchewan at 500 hectares per year.
We have estimates of how much land conversion is happening. We don't have it down to the spatial precision of this room, that kind of level. We have regional estimates, and there's a certain amount of uncertainty attached to those estimates.
Senator Ogilvie: I understand your qualifiers but I want to be sure I have it correctly. The average of 3,000 hectares per year nationally is based on the 20-year period that you referred to from 1990 to 2010.
Mr. Huffman: Yes.
Senator Ogilvie: That is largely class A or class 1 quality land.
Mr. Huffman: About 72 per cent of that is Ontario, Quebec, Prince Edward Island and British Columbia where the majority of the prime farmland is.
Senator Ogilvie: Whereas the 2,000 hectares coming into production from forest land is class 4 or 5.
Mr. Huffman: Yes.
Senator Tardif: Each province takes a different approach to land use planning and ownership. Several witnesses have mentioned to us the need for better alignment and understanding of what's happening across the country.
You've mentioned the tool that you have presently in your explanations to Senator Ogilvie, but do we need another national tool to better understand the tracking of land ownership or the use of land management? How do we evaluate? Do we have the comprehensive data we need? I know several provinces have indicated that there should be a better alignment to gain an understanding of what is happening.
Mr. Gray: I am catching a thread of the same theme between Senator Pratte, Senator Ogilvie and you, Senator Tardif, on some centralized geospatial system database where we could collect information and have information available.
If you turn to figure 4, I know you can't read it but you can get the gist of it. I made the same point, by the way. It's the way these systems work. You can see the idea of layering. Each of those layers has specific information that is acquired through different technologies.
The public service is working toward a Federal Geospatial Platform. If you're not familiar with it, I am sure Natural Resources Canada would be happy to talk to you about it. The idea is getting the federal family in order so that we're acquiring data one time. This data is remotely sensed. It's from satellites and it's generally very expensive. As a federal family we get relatively cheap or free data from RADARSAT.
RADARSAT data is essentially a Crown asset. It's good for soil moisture and we're using it for other things. As far as detecting land use change, it's generally optical data versus radar. It's generally someone else's satellite and we have to pay for it if we want to get it down to the resolution of, say, the size of this room versus a farmer's field.
We are working as a federal family to look at what are the most important acquisitions as they relate to geospatial data when we want to detect land use change. If something has changed, if it has gone from X to Y, and you see those patterns, you start asking what and why those changes are occurring.
This spills across numerous departments so that's why we're building it as one federal family. We have governance for it but it's being led by Natural Resources Canada. I would encourage you to speak with them.
We have to get the federal family in order first, buy once and reuse many times, and have it openly available. When you get into ownership and it's not Crown or federal land, you're dealing with provinces, territories and municipalities. We, the big federal family, are working with them to make available a broader geomatics platform for Canada that would include municipal, provincial and federal layers.
The federal family, led by NRCan, is using geomatics terms, codes and standards such that the data is interoperable so that everyone in the world is using the same standards and we are following international standards. I hope that begins to answer the question.
Senator Tardif: Do you have sufficient resources to do this work? Are additional resources needed to carry out this comprehensive data plan?
Mr. Gray: To back up in full transparency, I was at NRCan and I was the one that was partially leading the development of the Federal Geospatial Platform. I think we have the resources, but we need to be smarter.
Five years ago we had one department buying a piece of imagery that was licensed only to that department or branch. We had another one doing the same thing. They weren't talking to each other. So if we pooled our resources, we could determine what are the three biggest priorities for the government when it comes to remote sensing. We could be smarter, and we're doing that. I am not sure we need more money.
Senator Enverga: I can see that you have done some land surveys from the year 1960 to now. You mentioned climate change a few times in your report. Have you seen from your data any changes with regard to land use due to climate change? Have you seen any difference? Is there more or less land because of climate change?
Mr. Howard: It's a little early to tell. A lot of factors are involved in how land is used. Certainly land is coming into production that was not farmed 20 or 30 years, but we can't say right now that climate change is causing that.
We can say that groups like the viticulture industry are very interested in looking at where they can locate. If we take the example of British Columbia where there are a lot of wineries in the Okanagan, they are looking to find areas where they can expand. We have had questions about whether land can become more suitable for these types of crops.
It's difficult to answer now. We're working on those. It is a long-term approach that has to be looked at. There is research being conducted or about to be conducted and discussion right now about what land will look like in mid- century. As I mentioned in my opening remarks, there are ways that we can plug climate scenario data into the land suitability rating system. That has had a lot of attention from hydrologic modelers and other researchers.
The questions we have to ask are: How much land will go from marginal and improved to be class 1, 2 or 3? How much of the unsuitable land will become marginal land? How much of our prime land will lose productivity as a result of climate change?
It may not be strictly because of things like drought. It could be extreme heat stress, pests or a number of things. We need to be aware of a number of questions that we still need to answer. I would say we're at the very early stages.
Mr. Gray: I would like to put you at ease. We are working on that. As a branch, we have scientists working on our four strategic objectives: productivity, environment, attributes and threats.
The threats are related to moisture, heat and pests. We are already looking at that. We are improving varieties of wheat, barley and oats, for example, to be resilient to a changing climate.
We have a tool that looks at cropland. We have a crop inventory. Every year we have a snapshot and we know what crops are growing where. We have seen a change over time. Two decades ago I don't think there was an acre of soybeans in the Prairies. Right now it's in the order of 2 or 3 million. You can't quote me on that; I will check. Yes, they are breeding varieties of soybeans that are more able to grow in our climate, but it's also a function of our degree days having changed.
Senator Enverga: You mentioned some changes in land use over time. Are you monitoring the changes being done to the land through the use of science-based technologies? Do you consider them in your study and your research?
Mr. Gray: Both the Canadian Forest Service and Environment and Climate Change Canada are doing remote sensing to look at changes in natural systems so that a forest or a wetland over time is not being influenced directly by human activity but is being influenced indirectly through a changing climate. Those studies are under way in those two departments.
Senator Woo: I endorse Senator Enverga's line of questioning on the issue of the impact of climate change on agriculture. I encourage the committee to stay tuned to the work you're doing. Perhaps we can get an update at a later stage on some of your findings.
My question has to do with whether any of your GIS data sets allow you on a longitudinal basis to assess the productivity of land, farm yields or whether that's something that has to be done through farm surveys. Could you assess how innovative and productive farmers are with the use of their land over time through remote sensing?
Mr. Howard: We can model crop production. We've actually had some success with that. As a matter of fact some of the modelling that has been done with Agriculture and Agri-Food Canada has been adopted by Statistics Canada in its annual reports.
We're still working on improving the accuracy of that. That will change depending on the years we have. We do better in average years and we don't do as good in extreme years. That's something we will fix with time.
I believe the other part of your question was more about the use of new crops.
Senator Woo: The preamble was on the impact of climate change on agriculture and different types of land coming into use and going out of use. It was a parenthetical statement to say that this committee would be keen to watch that work closely.
I think you answered the second question on whether any of your data sets allow you to make assessments of the productivity of the land over time.
Mr. Howard: Our models use a combination of the best satellite information and standard point-based information such as meteorological data.
Mr. Lee: We use satellite imagery for that type of work. Another product we use is called the NDVI, Normalized Difference Vegetation Index, which compares the health of the crops against time. This gives us an idea of the health of the crops and how crops are progressing throughout the year. It doesn't give us an exact yield but it does allow us to understand the health of the crops throughout the year.
Senator Woo: Could you give us some generalized findings about productivity in the farm sector for particular crops or particular regions, anything that you might feel comfortable speaking on?
Mr. Lee: That is outside of my area of expertise but we can certainly get you that information. We make that product online through an interactive map as well as downloadable data sets. I can take that question back to the experts in that field specifically to get some of those numbers for you.
Senator Woo: I raise the question only because the issue of decreasing farmland has to be taken in the context of possibly increasing productivity and yields of existing farmland or the shrinking base of farmland. We need to consider both questions in unison.
Mr. Gray: If I may follow up on that, we will come back to you with the change in productivity of 10 major crops or something like that. We can't get all of them because we won't have enough information.
A general rule of thumb in innovation and agriculture is that crop productivity increases about 1.5 per cent a year per unit of land base. It's driven by innovation. It's driven by R & D.
We'll get you the 10 crops and you could see what has changed over the last 30 years.
[Translation]
The Chair: Many of the senators have questions, so I would ask everyone to kindly keep their questions and answers as brief as possible. We realize you are scientists and have trouble providing short answers, but we need to stick to each senator's allotted time.
Senator Dagenais: My question is for Mr. Howard. You talked about a classification system where soil is rated on a scale from 0 to 7, class 7 being the worst rating. Are there ways to improve the productivity of certain types of soil, giving them a better rating?
[English]
Mr. Howard: In some cases limited things can be done such as the use of fertilizers, soil amendments and drainage. Changing the climate or the microclimate is very difficult. All the things we can do require money and require the farmer to invest money, which then comes out of his return on crops.
Perhaps Dr. Gray has some research that will shed some light on the specific amendments we are working on to improve soils in those broad areas.
Mr. Gray: No, not off the top of my head.
Mr. Huffman: To comment on that, a primary improvement we see is artificial drainage for land or soil that is poorly drained. Much of the classes 2 and 3 land in Ontario and Quebec is down-rated as class 3 because of excess wetness. If the producer puts in artificial tile drainage it brings up productivity. The land is still rated as class 2 or 3 because it has that limitation and requires that extra management.
Another one is fertilization for low fertile soils. You can add more fertilizer to bring up productivity. Sometimes the soil is down-rated because of excess stoniness. Stones can be cleared or removed mechanically to improve the productivity of the soil.
Generally you can get a class 2 soil to perform like a class 1 or a class 3 to perform like a 2, but not bring it up in any practical sense.
[Translation]
Senator Dagenais: There are costs associated with that. Can farmers afford to pay for that, and is there an interest in transforming soils?
[English]
Mr. Howard: I can't really answer that question. I am not close enough to that scene to offer anything insightful.
[Translation]
Senator Dagenais: Do farmers use methods that can reduce the quality of some types of farmland? Sometimes they change production on the land to maximize returns to the detriment of soil quality. Is that something you have noticed?
[English]
Mr. Howard: We've had a lot of experiences particularly in Western Canada where farming practices were not matched to soil conditions on the farm. During the droughts of the 1920s and 1930s that resulted in a lot of soil drifting and soil erosion.
There certainly are farming practices that may work very well in one area that are completely inappropriate in another area. The key is being able to understand your land and being able to develop the best management practices for that land.
Senator Bernard: My question goes back to the analysis of land use and the farmland being lost to urban expansion. I am wondering if your department is doing any sort of qualitative analysis of the underlying causes of that.
Why is this happening? How does it contribute to the food deserts we see in many urban settings?
Mr. Huffman: No, at the moment we're not studying the driving forces of that land use change. We can determine it from the type of change. If land is being converted from cropland to urban settlement we can infer that population increase is causing that change.
The conversion of forest to cropland tends to be an individual producer decision. We're not really doing research into the driving forces of that at all. We study the fact that the use of farmland is being intensified generally. Much of the good land that is currently growing lower value crops is being converted to higher value crops on a regular basis. This means there has been pressure on increasing the land area for hay and pasture, for example. There is nothing in our sort of scientific study that looks at the driving forces of land use change.
Senator Bernard: Is that work being done by anyone else, or do you know?
Mr. Huffman: Not that I am aware of. I can't comment too much on that.
Senator Beyak: I live in an agricultural area. The scope of this information is fascinating and remarkable.
My question is purely practical. I am always surprised how many people watch this committee. I guess it is because we all have to eat. Could you explain for the viewers at home what constitutes soils 1, 2 and 3; are there ways to make 4 and 5 comparable; and is there a branch of your department that's looking into that?
Mr. Huffman: We start out rating the soil and assuming it's a class 1, that it's very good soil. Then we look at limitations to crop production. If the soil is infertile, like sandy soil that doesn't have a lot of nutrients, it would lower the rating to class 2 or 3.
If the soil has excess water so that planting is delayed in the spring, it would degrade the class to 2 or 3. The rating classes are based on limitations to production: Stoniness, rockiness near the surface, low fertility and salinity particularly in the prairies are problems that will reduce the rating for a soil.
Some management practices can raise the performance of the soil by a class or so, but the limitation essentially remains in perpetuity. The management practice has to be repeated to keep productivity up.
Mr. Lee: As Allan mentioned in his opening remarks, our land suitability rating system looks at three factors: climate, the soil of the area such as rockiness and drainage, and at the needs of the crop. This land suitability rating system has the same seven classes but is specific to crop needs. We have it for several different crops.
We have it for canola, corn, wheat and barley. It looks at the needs of those individual crops. The ratings may change depending upon the types of crop grown in the area.
When discussing moving land up a class from 4 to 3, our producers are very innovative. They are able to squeeze the most productivity out of their land, and we have great science in the department that supports them.
Senator Gagné: You mentioned in your presentation meeting with your provincial counterparts and initiating discussions about a common integrated approach to increase the resolution of our soils data.
When you meet with your provincial counterparts what other needs have been expressed by the provinces? Are the issues of farmland use, management, tracking and acquisition brought forward by the provinces?
Mr. Howard: I will start to answer the question and then pass it on because we may have some different experiences.
I have been involved in primary discussions regarding soils data, and the ability to combine it and build a common approach to improving the resolution of our soils information.
Land use has not come up in discussions I have had, but I will pass the opportunity on to my colleagues to comment.
Mr. Lee: I will echo what Al said. In many of our discussions our provincial soil data management colleagues are interested in understanding how to improve the data, align it and ensure there is a nationally consistent product.
I am hearing more around soil health. My discussions are more at a working level. I am not privy to what Dr. Gray may hear at the higher levels.
Mr. Gray: Each of the provinces is looking and tracking land use. It's their property, their land and their responsibility. Depending on the province they have a great deal of expertise and capacity.
At the federal-provincial level we try to ensure we're classifying or categorizing the land at 1, 2 or 3, and getting it down to high resolution by tracking the scale of a room this size, for example. We want to ensure we're using the same standards and are comparing apples to apples. We're looking at how the class X lands in Alberta compare to those in Ontario. We need the same metric to be meaningful.
Our job at the federal level is to ensure we all work together and have comparable information. We collaborate on the science to better understand what's driving that soil productivity if we can.
[Translation]
The Chair: Before we begin the second round, I have a question for you.
You are scientists. We have a mandate to study the acquisition of farmland. Do provincial farm credit offices or Canadian banking institutions come to you for advice before granting a loan to acquire farmland? Say a young Ontario farmer needed a $500,000 loan to buy farmland. Would the farmer's financial institution, be it a bank, credit union or farm credit office, check with you before granting the loan?
[English]
Mr. Howard: As a rule, no, I have not been contacted by any bank. Our understanding is their specialists look at information that is available publicly. I have not been approached by any bank for this.
[Translation]
The Chair: Farm Credit Canada does not consult you either?
[English]
Mr. Howard: No. As a matter of fact I worked in the same building as Farm Credit. There were opportunities when we could have met in the hall but we didn't. I am thinking they are very comfortable with the information they have.
Mr. Gray: I am hoping that they're consulting and using our CanSIS site as a baseline for information. There is a great deal of information at the level they would probably need. I am hopeful that at least that is happening.
Mr. Lee: I have a very similar comment to Dr. Gray's. We make as much of our soils information available as we possibly can through our CanSIS website. These people can self-serve and don't necessarily always need to consult us to understand.
Senator Mercer: Earlier someone raised the question of viticulture related to British Columbia. In Nova Scotia where several of my colleagues and I are from, we notice a fair amount of land moving to growing grapes.
Have you done any studies in land use when farmland moves into grape growing? It's almost always for the production of wine, a worthwhile venture. I enjoy a glass of wine once in a while but it's not actual food production. Have we done any analysis of land being taken out of food production to be put into production of alcoholic beverages?
Mr. Huffman: Not to my knowledge. We certainly monitor that as part of the national inventory reports for greenhouse gasses. The two enterprises have different impacts on greenhouse gas sources in sync. It comes into play there.
Senator Mercer: How?
Mr. Huffman: Woody crops sequester carbon from the air in a greater sense than other cropping systems. If you're putting in vineyards you're trapping carbon into that woody biomass of the vineyards. It's a positive effect to go from corn to grapes in terms of carbon sequestration and greenhouse gases, but as far as the impact on the soil, not to my knowledge. There may be other comments.
[Translation]
The Chair: My apologies, Mr. Gray, but time is growing short. We have to keep answers to a time limit. I think Mr. Lee added to the answer. If you would like, you can provide us with your comments in response to Senator Pratte's question.
[English]
Senator Pratte: Dr. Huffman, you gave a couple of statistics on the change of land use from classes1, 2 and 3 to urban use for a certain number of provinces but not Quebec. I would be curious for numbers for Quebec since it has a stringent land use protection regime.
Mr. Huffman: Our numbers for Quebec show that the cropland to settlement was 446 hectares per year between 1990 and 2010, and the convertion of forest to cropland was 378 hectares per year.
That is about mid-range across the provinces. The range for provinces goes from Newfoundland and Labrador being almost insignificant at 6 hectares, to Ontario at 1,300 hectares.
Senator Ogilvie: Throughout this study it struck me that the issue of salinity hasn't appeared at all in terms of its impact on valuable soils used for agriculture. In the last third of the last century it was the major issue worldwide in terms of taking land out of production. Increased salinity arises from fertilizers and so on in the soils, yet to my knowledge nobody has mentioned it. Perhaps somebody has that I missed but to my recollection it hasn't occurred.
Has it suddenly disappeared as an issue or are we flushing it all out into the lakes and rivers now and the soil is regenerating on a fairly regular basis?
Mr. Huffman: My perspective is that we've learned how to manage saline-affected soils more effectively. The producers and the researchers with Agriculture and Agri-Food Canada indicated that it was best to leave those soils in a natural or permanent vegetation of hay and pasture. Probably part of the fact it has become less of an issue is that producers are learning how to manage it.
Certain management practices can solve the problem, but I don't think they are widespread. I would suspect it is learning to live with the saline infected soils.
Mr. Howard: To a certain degree salinity is climate driven. If conditions are dry after a period of wet, higher water tables bring those salts to the surface. As Dr. Huffman pointed out, that is quite well understood and managed now.
Senator Tardif: I am a senator from Alberta. I was interested in your figure 3. You've indicated that conversion of forest land to farmland in Alberta is about 2,000 hectares per year. Where on your map would that conversion have occurred? Would it have been in the northern part of Alberta?
Mr. Huffman: It would be in the northern fringe area between the agriculture white zone and the forest zone. However, my numbers show that for Alberta it's 900 hectares per year.
Senator Tardif: I am sorry, 900 hectares mostly in the white area on the map.
Mr. Huffman: Along the fringes of the coloured map, just on the edges. It's opening up more land in the northern portions just because that's where it is available.
Senator Tardif: What category of soil would that be?
Mr. Huffman: Mostly classes 3 and 4, with excess wetness and short growing seasons bringing the class down. Primarily the shorter growing season would be the limitation there.
[Translation]
The Chair: Gentlemen, your input is greatly appreciated. This is the first time we have had a group of scientists provide such valuable insight into our study. It will certainly go a long way towards informing our report on farmland acquisition. The work you do is necessary, and that will be even truer going forward. Given the reduction in farmland, it will be important to make sure we get the most out of it.
We will now move on to the second half of our meeting and our second panel. The committee has the privilege of hearing from two distinguished individuals. First, we have Pascal Thériault, Agricultural Economist, Faculty of Agricultural and Environmental Sciences, McGill University. Welcome, Mr. Thériault.
Next, we have Brady Deaton Jr., Professor and McCain Family Chair in Food Security, University of Guelph. Mr. Deaton, welcome.
Mr. Thériault, the floor is yours.
Pascal Thériault, Agricultural Economist, Faculty of Agricultural and Environmental Sciences, McGill University, as an individual: Farmland ownership is an issue I care deeply about and has become a hot topic in recent years. Farmland prices have risen significantly thanks to a perfect storm of conditions in both the farming and non-farming sectors.
First, low interest rates have made it possible for farmers to pay more for land in relation to the same payment. Second, attractive grain prices in Canada's Prairies have raised profit margins, thereby allowing businesses to buy more land.
Third, a phenomenon in Quebec and Ontario, in particular, has played a role: the lack of dairy quotas under supply- managed production. Dairy farmers unable to reinvest in quotas turned towards the acquisition of farmland, exerting pressure on land prices. Given that the agricultural sector does not operate in isolation, investors outside the sector took notice of the 10-per-cent, 15-per-cent and even 20-per-cent increases in land prices. This made purchasing farmland very appealing to outside investors.
Producers put pressure on the markets, and outside investors certainly added to it. Farmland has certain unique features. Other than through deforestation, which is rather limited in Canada, we cannot create more farmland; we are already maximizing our use of it. The scarcity of land makes it very tempting for producers to conduct land transactions as soon as an opportunity arises. That is especially true given that a piece of farmland will be put on the market every generation or every second generation. If a producer misses an opportunity, they will have to wait 25 to 50 years.
Another consideration is the municipal or proximity premium on farmland. As a farmer, I have a definite interest in paying more for a neighbouring piece of land because it will cost me less to farm that land. That contributes to a phenomenon where the purchase of farmland is not entirely rational.
Furthermore, farmland is part of a farming operation. Agriculture is a sector of the economy that requires more asset investment to generate a dollar of revenue. While farming operations have become more productive over the past 10 to 15 years, this remains a challenge.
Clearly, the impact of the increase in farmland prices is not merely negative. If I am a farmer and the value of my land goes up, my financial capacity has the potential to grow if the profitability of my operation follows suit.
A downside exists for farmers in the Prairies. Good grain prices and better profitability have tremendous benefits. When it comes to livestock production, though, the increase in grain prices necessarily means higher production costs and less purchasing power to acquire land.
I want to raise another important point. When producers reach retirement age, they have to decide whether to sell their land to a next-generation farmer in the family or sell to a stranger. Selling to a stranger is very attractive because of the premium the producer can get for their farmland, a financial win for the producer. Conversely, selling to a next- generation farmer in the family, so that the farm continues on the same path, can mean leaving a lot of money on the table for producers, in the name of a legacy gift, and losing out financially.
For young farmers who unfortunately do not have access to farming operations, the increase in land prices is becoming a problem, because it prevents them from obtaining adequate financing in the face of high land prices. Sometimes, we see a difference between farmland's economic value and financial value. Land prices can go up. If land productivity does as well, great. If not, returns on farming asset investments go down. Indeed, past a certain point, it is no longer possible to take advantage of farmland whose use is already being maximized.
It should be noted that some producers, particularly in Ontario, are disinvesting in farmland and, in exchange for 15-, 20- or 25-year contracts, are willing to sell their farmland to outside companies while continuing to farm it. The benefit to farmers is a significant capital contribution. You have capital, farmland, which generates a return of 3 per cent, 4 per cent or 5 per cent, so you turn to the markets to sell that farmland. That brings in considerable sums that you can use for reinvestment in your operation and more productive assets.
As far as land ownership goes, prudence is of the essence because farm profitability seems to be on the rise. Is that solely attributable to the fact that the most productive farms are continuing to improve? More than likely. In that context, more productive farm operations will have more resources to acquire land, whereas smaller farms will be doomed to remain small.
That covers the bulk of what I wanted to discuss with you this morning.
[English]
Brady Deaton Junior, Professor and McCain Family Chair in Food Security, University of Guelph, as an individual: I am honoured to be here today. This is a timely topic as we have just surveyed more than 2,000 farmers. I will bring some of the insights from that survey to this discussion today and leave information that I talk about with Kevin after I am done. The other data I will talk about is in two reports that are up on my website, and Kevin will provide you with a link to those.
I will now briefly overview some of the key macro forces that influence farmland prices. I will often refer to Ontario in my discussions because that's where my research is but the insights are generally applicable throughout Canada.
I will also discuss farmer concerns about non-farmer ownership of farmland and finally give a brief overview of the suite of policies that can influence who can own farmland. I look forward to discussion and providing additional details in answering your questions.
Farmland prices have been increasing at high rates. The Municipal Property Assessment Corporation estimates that between 2012 and 2016 the average increase in the overall values in Ontario was 16 per cent.
One major factor driving farmland prices over the last 10 to 12 years has been the low interest rate environmen. This is a widespread phenomenon and has influenced asset values in both Canada and the United States. Even a conservative estimate of a 2 percentage point drop in interest rates would be expected to have a large and positive effect on the price of farmland.
The rise in farmland values also depends on the return to farming and this depends on both the price of outputs and inputs. Emphasizing the former, in 2012 corn prices soared to close to double their current price per bushel. From then to now our surveys from Ontario suggest that rental rates have also appreciated. The combination of higher rental rates, a proxy for the net return to farmland, and the low interest rate environment is consistent with our experience with land appreciation.
It is important to keep in mind that the variation within the provinces in terms of both cash rents and farmland prices is substantial. To illustrate this point concretely I'd like to draw from a very recent survey conducted with farmers in Ontario.
The median reported rental value for a tillable acre in Perth County was $300 but $150 in Wellington County. The price per tillable acre according to our survey of farmers in Perth was $18,500, while it was $11,500 in Wellington. These differences likely reflect differences in the productive character of the farmland and some of the issues that were raised in your previous discussion.
Let me also add particularly in terms of southern Ontario that location matters. In southern Ontario near the GTA cities farmland prices are likely to reflect future non-farm development uses. A great deal of research suggests that proximity to urban areas places upward pressure on farmland values.
Finally, though I do this with some caution, we can use some of our recent results from Ontario farmers as a bit of a crystal ball. In our recent survey the majority of farmers thought farmland prices would remain the same over this year. Some 35 per cent thought they would rise and only 8 per cent thought that the farmland values would fall.
I want to briefly address concerns associated with farmland acquisition. At the outset I should note that there are two sides to an exchange. Hence buyers and sellers are differentially affected by farmland price appreciation. Whereas farmers and farmland owners selling land benefit by price appreciation, farmers seeking to purchase farmland are discouraged by the higher farmland prices.
The issue of who owns farmland and non-farmer acquisition of farmland is important to many farmers and farm groups. The National Farmers Union, for example, emphasizes the need for farmers and local families to own farmland. I have heard similar statements from farmers when giving presentations throughout Ontario. In this regard let me raise a couple of issues that might be helpful to you.
First, this is an historic concern. In documenting the early history of agriculture economics in the United States, Paul Barkley wrote of an early session to address the rapid increase of the system of land renting and the absorption of small holdings by wealthy landholders. The time of this session is remarkable: 1897.
Second and related to this point, the farmland rental market is well established in Canada. Presently a bit north of 30 per cent of the farmland is in the rental market. Our research suggests that the majority of this rented land is not owned by active farmers, at least as established through interview with farmers asking about who is their landlord.
Farmers benefit from renting land. Renting allows them to get up to scale without putting all of their investment in land. Non-farmers engaged in the rental market appear to be interested in holding farmland as an investment that has a return in both rents and potential land appreciation.
Importantly, our research suggests that the majority of these non-farmer landlord renters are Canadians. In a 2000 survey of 207 farmers in southern Ontario only 1 per cent of farmers identified their landlords as foreign. This is a rather crude approach to doing this. I would be happy to touch on the data discussions that you had earlier. Hence investment in farmland and speculation on farmland values appear to be of far more interest to Canadians than to foreigners.
This low figure parallels data from the United States. Specifically, the U.S. Department of Agriculture identifies less than 2 per cent of U.S. forests and farmland as being owned by foreign investors. It may be of interest to note that the country of origin with the highest ownership interest in United States farm and forest land is Canada.
I would like to turn some policy discussion. In Ontario, there are no restrictions on ownership of farmland. However there are tax implications. Foreign owners of farmland are not eligible for the significant tax breaks on farmland afforded to Canadian citizens. Other provinces, for example Quebec, have more restricted policies that generally seek to limit or control who can own foreign farmland. Often foreign ownership of farmland is limited.
These efforts may place downward pressure on farmland prices to the extent that they diminish demand. However, to the extent that these policies significantly offset the fundamental macro drivers that we both discussed, this is unclear to me. According to Farm Credit Canada or FCC data for the year 2015, Quebec farmland increased by nearly 10 per cent while Ontario farmland appreciated by 7 per cent.
I am prepared to discuss a range of additional policy issues including zoning and greenbelts and generally to discuss data collection needs as well. Thank you.
[Translation]
The Chair: Thank you very much, Mr. Deaton. As you know, the Senate gave the Standing Senate Committee on Agriculture and Forestry the mandate to study farmland acquisition.
The senators on this committee have a keen interest in what will happen in the future. When a country is able to feed itself well, it does not worry about where the food is coming from. Right now, people are not clamouring to enter the markets. Fruits, vegetables and meats: all the needs are being met. But who will produce those fruits and vegetables tomorrow or the next day, and who will own the farmland? Will farmers still be farmers or farm workers? That is one concern the senators have with regard to the transfer and acquisition of ancestral or family farms.
Your remarks this morning are giving us some reassurance. This is a problem we've noted over the course of our meetings, and your comments are comforting. On that note, I will turn the floor over to Senator Mercer.
[English]
Senator Mercer: Mr. Deaton, you talked about land rental and that your market research shows that about a bit north of 30 per cent of the farmland is in the rental market. How much land is that? How many hectares are we talking about?
Mr. Deaton: I don't know. The reference to that is from Statistics Canada. It's in the report that you'll have. I can't remember exactly how many acres of farmland that Statistics Canada reports, but you would be able to multiply that figure. For a little more detail on that figure, roughly 21 per cent of that is private land and 13 per cent of that land is rented out by government.
Senator Mercer: Is this something you think we should be worried about?
Mr. Deaton: What?
Senator Mercer: That more farmland is now in the rental market as opposed to being directly owned by the farmers.
Mr. Deaton: No.
Senator Mercer: That's a simple answer. Is that answer based on the fact that it keeps the land in production as opposed to the opposite of taking land out of production?
Mr. Deaton: It's not clear to me that these aren't mutually beneficial arrangements. In one of the reports that you will have we find that larger and larger farmers who are primarily responsible for the large amount of food production in the grocery stores tend to increasingly rent-in more land.
My sense of what is going on is that this affords them the opportunity to invest a large amount of their wealth holdings in land to get up to higher amounts of scale when necessary through rent-in land and then potentially not have all their eggs in that basket.
Senator Enverga: I have learned many things about farmland. Both of you have concerns about the availability and the cost of farmland due to land speculation.
Should the government legislate to control or discourage land speculation to protect new or real farmers who create food security and promote low-cost food? Is there something we should do with the government so that land will be available for farmers? Should we maybe control encroachment of urban areas on our farmland?
Mr. Deaton: There are laws. Currently most farmland in Ontario would be zoned for agriculture use. Changing the use of that land for a non-agriculture purpose would be under the municipality. There are also greenbelt acts like the one that surrounds Toronto. In theory they are designed to ensure that farmland near urban areas remains in agriculture use.
There are land policies in place right now that identify land in agriculture and there are policies that attempt to strengthen them. Are you asking if there should be a federal law?
Senator Enverga: That is right, a federal law.
Mr. Deaton: Unless I knew exactly what law you would be putting forward, I don't think I would be able to answer it in a way that would be illuminating.
Mr. Thériault: My colleague mentioned that Quebec had some very strict rules on land ownership. They also have strict rules when it comes to land development.
Could it be relevant to make sure our land is protected and the farmland is only used for farming? I would say definitely. Should we guarantee access to farmland for new farmers? We could probably put in place the means to facilitate younger farmers so they can get established. I am not convinced when it comes to putting in place laws that would limit the way farmers do land transactions between each other.
Senator Enverga: How about people who are buying farmland but never using it? Have you seen this? Should we be controlling this land speculation?
Mr. Thériault: I have seen cases where people invested in farmland as a retirement plan. I don't think there is anything wrong when it comes to buying farmland to farm in the future. Probably we could have ways to ensure that the farmland is currently being used and rented out until those people are ready for full-time agriculture.
Mr. Deaton: I am not aware of the magnitude of that data. Much of the land that is purchased by institutional investors is then leased out or rented to other farmers.
Senator Woo: I see a nice intersection of issues being brought up by each of you. I want to establish with some clarity your positions on a number of issues and some of the underlying principles to help us address the specific question this committee is looking at.
What is causing the escalation in farmland prices? On the question of the causes of increases in farmland prices, Professor Deaton, you were clear in saying that it was multi-factorial.
Do low interest rates and rising commodity prices play the bulk of the role in the increase in farmland prices, with a smaller attribution to regional diversity? I would like to hear your view, Professor Thériault, on what is causing the rise in farmland prices.
The related question is on the role of institutional investors in being a major cause of farmland price increases. Professor Deaton was clear that they didn't play a major role, but I would like more clarity on this question.
Do you think institutional investors perform a function in providing the capital requirements for increasingly capital intensive agriculture? The related question to institutional investors is on foreign institutional investors. Do you see a role for these players in our agricultural market? What is the extent to which they are already players in Canadian agriculture?
You have given us, Professor Deaton, a very low estimate of foreign investors. Whereas, Professor Thériault, in your op-ed you seem to be very much against foreign investors. I would like to understand that opposition based on current estimates of foreign investment. Why do you worry, if I can put it this way, about the colour of money?
I am more focused on keeping land in farmland production and making sure that farmers are farming the land, whoever owns it.
Mr. Thériault: When it comes to causes of farmland value I totally share my colleague's arguments on low interest rates and good grain prices. I talked about the quota effect in Quebec and Ontario where producers had a chance to invest in farmland.
Regarding foreign institutional investors, it is not that I do not believe in the colour of money. It is more a case of Canada having Nordic-type agriculture. I don't see it as being as interesting for other countries that can produce year- round when it comes to investing in farmland from the perspective of foreign investors.
Institutional investors, whether local, domestic or foreign, have the same ultimate goal. If there is a return to be made on farmland the temptation for investment will be there. In the end the result will be the same whether they are local institutional investors or foreign institutional investors.
Senator Woo: Why do you say they need to fight foreign capital? Maybe the English translation is bad in the La Presse op-ed, but in the last paragraph you talk about the need to fight foreign capital.
Mr. Thériault: I meant it as a way where farmland should be used to feed people.
Senator Woo: Agreed.
Mr. Thériault: Therefore, if we have farmland in Canada it should be used to feed Canadians. If foreign investors are to invest and lease out land to Canadians my argument does not hold anymore.
Mr. Deaton: I agree. We use agricultural land to feed all sorts. We export a large amount of our agricultural product. It is important but maybe I didn't deal with that part. We use our agricultural land in the entrepreneurial way that farmers pursuing their interest have done in a beneficial way to them and to our country as a whole.
[Translation]
Senator Dagenais: My question is for Mr. Thériault. You spoke of the opportunities available to a producer who leases their land to take advantage of capital while retaining the right to farm the land. I imagine that right is temporary but can be renewed for a certain price. Do you have a profile of the kind of people interested in such an investment? Do you think this practice will be speculative time-wise?
Mr. Thériault: I don't have a profile of the type of investors buying the land. In my experience, the producers inclined to adopt such an approach are usually those facing uncertainty in terms of farm succession. They opt to disinvest from a portion of their business right away in preparation for retirement while continuing to run the farm. A farmer in his early 60s may be entirely content to lease the land for a period of 20 years, even though many farmers seem to think they will live forever.
Senator Dagenais: In the region where I used to work many years ago, I knew farmers who had sold their land while retaining the right to farm it, ensuring that they would be able to retire comfortably. The future of their farm after retirement was fairly uncertain.
Mr. Thériault: We also see the opposite situation, where farmers have to stop farming because there is no one to take over the farm and so lease their land to other farmers. That is a more common trend in terms of farmers leasing their land to one another.
Senator Tardif: I'd like to pick up on a comment we heard from a representative of the Fédération de la relève agricole du Québec. She suggested introducing a mechanism to rank farmland buyers in order of priority. First dibs, so to speak, would go to young farmers, followed by farmers with existing operations and, then, other stakeholders. Do you think such a mechanism could work in Canada?
[English]
Mr. Deaton: It runs the risk of not being efficient in the sense that a competitive buyer might be more productive. Since you're guaranteeing it to the next generation in the bidding process, if they are not more productive than the person who would have otherwise had the land I don't think it would be efficient from the standpoint of the definition of efficiency maximizing net benefits.
[Translation]
Mr. Thériault: If you look at farms as business entities, I think we may well lose efficiency if the next generation of farmers is given top priority. However, if we decide to give priority to people in production or going into production rather than to other stakeholders, why would not existing producers have the same opportunity to buy their neighbour's land as the next generation wishing to settle there? This is the sub-question raised by the position of the Fédération de la relève agricole.
Senator Tardif: So you do not support that position.
Mr. Thériault: No.
Senator Gagné: You both mentioned public policy. On behalf of the Senate committee, we still want to make some recommendations to the government.
Mr. Thériault, in your article in La Presse, in the last paragraph, you mentioned that it is important to develop a clear and effective national agricultural policy. Could you describe the features of an effective national agricultural policy?
Mr. Thériault: My remarks are catching up with me. Right now, some provinces have rules in place governing the acquisition of land. What I was trying to say in my comment, without going into the current provincial jurisdiction, is that the government needs to take a national direction to better guide the way legislation is applied from one province to the next. In Ontario, anyone can buy farmland, while Quebec imposes restrictions on the period of residence and on the area. This is also the case in Prince Edward Island. My remarks in La Presse, in the last paragraph of my article at least, focused on the fact that, if the federal government decides to intervene in the land acquisition process, it would have to be in consultation with the provinces to see whether it would be possible to establish one guideline for the various provinces.
Senator Gagné: Thank you.
[English]
I think you mentioned policy issues and said that you were probably prepared to discuss a range of additional policy issues including zoning, greenbelts and data collection needs.
Could you briefly give us your view of these additional policy issues?
Mr. Deaton: I touched on the point about zoning earlier. The underlying zoning is one of the policies that will determine whether land remains in agriculture regardless of who the landowner is. That is typically changed at the municipal level but there are provincial overrules of that. That is important to keep in mind because you can have changing ownership of farmland but the underlying zoning of how land can be used can remain the same. It is a dimension of policy and is related to something like the greenbelt.
It's important to keep in mind that the majority of people live in cities. There are tremendous agglomeration effects of cities. It is natural that those places would want to transform farmland into urban housing. That's always something to consider as well in the value of the farm versus the value of housing in near-urban areas.
An important issue is that people start to speculate quickly when there isn't as good data on something like foreign ownership of farmland and forest land as there is in the United States. I cannot say with certainty that I know what that is. I can say foreign ownership in the United States where they collect data is very small, with Canadians being the largest foreign owner.
One role of policy might be to support the clear collection of data in this regard to clarify these issues so we can address them if they become more concerning.
Senator Beyak: My question is similar to that of Senator Gagné. Could you tell me your ideas on a framework for the federal government to work with the provinces and the municipalities to develop that? Did you see a committee or a task force?
Mr. Deaton: Is that with respect to collecting data?
Senator Beyak: No, a strategy for land use. The provinces and the municipalities control it right now. You both suggested a federal government role in a framework.
Mr. Deaton: I don't recall that I did.
Senator Beyak: I thought I heard that in your last comment when Senator Gagné asked you about your policies. I will leave it to Mr. Thériault, then. How do you see the framework working?
Mr. Thériault: I would see it as a form of task force. It would be important that provinces agree on the level of control, if we can call it control, they want to establish. Preserving farmland for farming should definitely be the top priority in the end, as should limiting urban expansion up to a point and then looking at land ownership. I am a strong believer that farmers are one of the main drivers of farmland prices.
Senator Oh: Maybe you both could give me some feedback. Because the climate in Ontario and in the northern part of China is very similar I was told that a pilot project was going to be happening to grow rice for local consumption in Ontario and the majority for re-export to Asia. What is your opinion of that?
Mr. Deaton: I am not familiar with that project but I will say that Canada exports agricultural products to China all the time. I would basically view it within a similar context. The idea of experimenting with new crops that might be profitable to farmers is great, but I am not familiar with that project.
Mr. Thériault: I am not familiar with the initiative either, but I must agree with my colleague that Canada is an important exporter of food commodities and as such, we should grow rice for export if it's possible.
Senator Oh: Do you agree that the cooperation on agricultural development would be good for our export and food production?
Mr. Thériault: I am not familiar enough with the issue to actually make a clear statement on it so I will abstain.
Mr. Deaton: I am in a similar position.
Senator Oh: I will get back to you for more details.
[Translation]
The Chair: I have some pertinent questions. Quebec and Prince Edward Island are enforcing the most stringent legislation for the protection of farmland. In another Parliament during the 1980s, I participated in debates on the issue of agricultural protection, with the then Minister Garon. There was a gap in the legislation on farmland zoning. That is still the case today. Municipalities, through regional county municipalities, may request the zoning of an orchard for the construction of buildings.
The worst enemy of productive farmland is urban sprawl. In Montreal, urban sprawl has almost reached Saint- Hyacinthe. Yet the farmland is amazing. It's the same thing in Toronto and Vancouver. Should the Government of Canada not apply province-wide guidelines to minimize urban sprawl as much as possible? There would be savings on service costs, and good farmland would be saved.
I can give you an example from my personal experience. I had a house built in the town of Beauport in 1986. I was the only one in the field of cows. My youngest would go on the porch in the morning, and the cows would come. It was one of the best farmlands. Today, there is a block of 400 houses and a primary school on that land. Where will urban sprawl stop? Quebec prides itself on having the toughest legislation. However, the legislation has not worked as expected. When you arrive in Montreal and Toronto by plane, you can see it. It is striking. Should the Government of Canada come to an agreement with the provinces to pass legislation on the zoning of farmland? That's my question for you.
[English]
Mr. Deaton: It seems to me that to some extent it's a question that you're in the best position to answer.
Could the federal government do this hand in hand with the provinces? Let me make some observations that might be useful in thinking about the question of urban sprawl that also needs to be on the table.
There is the one hand and then the other. When you fly into Toronto you see urban sprawl, but when you fly out and look down you see lots of farmland and it's often shocking. The majority of people, roughly 90 per cent, are living in the urban areas on the fringe. They see development and sprawl as an intense issue.
There is a fair amount of farmland. Sometime in the 1920s we would have had more farmland and way more farmers. From that time to this time we have much higher production with about 2 per cent of the population I agriculture.
There are implications, whatever you decide is appropriate. There are always winners and losers. If we conserve farmland at the fringe through a directive then farmers who may see a diminution in land values may be the losers to the extent that it has effect on land prices in urban areas. That is something that also needs to be looked into.
[Translation]
The Chair: Let's not forget that agriculture has been mechanized a great deal over the past 50 years. We can shrink the lands for better production, but we cannot remove houses, buildings and highways. We cannot take tractors onto the highways and chickens will not hatch there. We are not there yet. Urban sprawl, whether we like it or not, is taking away productive farmland. Our committee is concerned about the future. What will happen in 10, 15 or 20 years?
Young people are already struggling to acquire farmland because of various circumstances, be it speculation or farm transfer. In addition, their area of arable land is being reduced. I'm not sure whether you were aware of it, but federal government scientists told us that the lands are ranked from one to seven. The number seven represents a large area.
Our committee must submit a report to the government, reflecting the concerns of the farming community. Agriculture is not the subject of lively discussions in Canada right now, because we live in a land of plenty. However, as soon as there are no more carrots at the grocery store, it will be war and it will be too late. There will be no more land for growing carrots. It's as simple as that. Today's efforts are for tomorrow's future. We have to submit a report to the government, which it will examine and then give us an answer. This is possible thanks to people like you who are constantly doing research. Speak loud and clear to those around you. The public must become aware of this reality. Thank you very much for your testimony.
Senator Woo, please be brief.
[English]
Senator Woo: To follow up on the chair's statement, it reflects a premise or underlying thesis in the testimony of many witnesses and the questions by this committee.
The premise is that there will be 9 billion people in this world by mid-century. We won't be able to feed them. Canada may have to be self-sufficient because there won't be enough carrots or some other vegetable crop.
Could you speak to the issue of whether we can feed the world? Is there enough agricultural production to feed the world? Is that really the issue we need to worry about or is it some other kind of distribution or marketization issue?
This is a big question but it is very central to many of the underlying questions that we've been asking.
Mr. Thériault: With our increased yield and technology producing enough food to feed 9 billion people will not be the issue. The issue relies on market access for these people. Can we get the food to the market and can we get the consumers to the market?
Mr. Deaton: I agree with that. It will also depend on the trust/trade relationships between countries to get to those with food shortfalls. That will be an important aspect along with the production, perhaps even the hardest one.
[Translation]
The Chair: Thank you very much, gentlemen. Safe return home.
[English]
This committee is now adjourned.
(The committee adjourned.)