Preserving PEI's farmland

How can a farmer afford to retire these days and who can afford to buy the farm?

It was a question of considerable debate during a recent day-long session in Charlottetown on Preserving Prince Edward Island Agriculture Land.

There was the income trust option that some insisted would create tenant farmers, there was the land trust option and there was an option that has met with considerable success in a sister province.

Its been racking up economic development achievements in rural Nova Scotia and could soon be planting some roots on Prince Edward Island.

Its a concept of going back to the neighbours and focusing on money sharing, said Chris Payne, director of Nova Scotias Community Economic Development Investment Fund (CEDIF).

Its just a tool to keep the money here rather than exporting it.

Payne was a guest speaker at the recent ADAPT council session and offered some ideas how the investment fund could help the million-acre farm.

The forum, chaired by farmer Elmer MacDonald, was held as a way to focus on the problem facing many farmers hereno successor, no way to retire and no one able to afford the entry fee.

Professor Tim Carroll of UPEI offered the financial vehicle of Real Estate Income Trusts (REIT) as a way to preserve farmland here in the future. Turn the farms over to the new generation and have faith, he insisted. We will always need food and there will always be people wanting to grow it.

Carroll suggested an REIT would provide similar success in which investors would supply capital for a farming operation and earn profits. However, the idea of REITs stung some of those in attendance who suggested it smelled of a return to the dreaded tenant farming of the 1800s.

Melissa Watkins, executive director of the Ontario Farmland Trust, said the preservation of farmland is a huge issue in Canadas largest province as developers clamour for land close to Toronto.

They say you can see the best farmland in Canada from the top of the CN Tower, said Watkins. We already have people from China buying up valued farmland here so they can grow food in the future for their own back home.

Payne said there seems to be considerable interest in Community Economic Development Investment Funds for rural development from the Island government.

Since being implemented in 1999, Nova Scotias CEDIF has acquired $27 million in assets and has given a boost to about 42 now profitable operations. Only two have failed.

Our concept is to see communities take ownership of small business and entrepreneurial ventures, he told a packed crowd at the Farm Centre.

You can invest $5,000 with the Royal Bank or take a risk in a local business and really see a difference.

Payne said $600 million is invested by Nova Scotians in retirement funds and investments but only two per cent in capital ever comes back to the province.

In order to reduce the fear factor, the NS government has established a 30 per cent tax credit on each $1,000 invested in CEDIF for a five-year period. So far about 4,000 residents now contribute an average of $3,000 annually.

The money has helped small business, wind farms, agricultural operations, high-tech and an assortment of other growing companies such as Just Us fair trade cafes.

We grow through word of mouth as one person tells another, said Payne. We dont have any professional sellers. It has to be a simple process otherwise youll see the eyes gloss over in prospective investors.

The visiting official suggested that if farmland was in need of preservation, a CEDIF could be developed in which a community or region invested in a farm operation and was able to provide the financing for a new operator.

We always plan ahead where to grow our houses and roads, but not where to grow our food, said Watkins, who pointed out incidents where prices of $5,000 an acre for Ontario farmland tripled when news of a car manufacturer surfaced.

We are even proposing that farmers are valued as critical civil servants as one way to help preservation.

According to statistics, 75 per cent of Canadian farmers have no successor and 97 per cent of new farmers practise direct marketing. The Guardian