Exclusive: Canadian province eyes tougher rules on investor farm buys

Mon Jan 26, 2015 5:42pm EST
 
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By Rod Nickel

SASKATOON, Saskatchewan (Reuters) - Saskatchewan is likely to tighten what are already some of North America's strictest rules for purchasing farmland as the Western Canadian province looks to fend off big money managers hungry for what they see as a winning investment.

The province, whose fertile plains grow more wheat than Argentina, has become the latest front in a global battle between investors keen to make large-scale land purchases and local farmers worried about being priced out of the market.

The provincial government said last month it would review its law governing farmland purchases in light of farmers' concerns about recent deals. That review will specifically consider closing the door on further purchases by the C$234-billion ($188.50 billion) Canada Pension Plan Investment Board (CPPIB), Saskatchewan Agriculture Minister Lyle Stewart told Reuters.

Farmers "are not high on the idea of institutional investors competing with them for the purchase of farmland," he said.

Stewart said the changes could also include measures to foil the plans of Vancouver-based Skyline Agriculture Financial Corp, a foreign-backed player looking to finance as much as C$1 billion in farmland purchases over the next decade.

Saskatchewan law already requires that companies that invest in farmland be 100 percent owned by Canadians, with foreign buyers limited to 10 acres.

Purchases by pension funds are also banned, but the Saskatchewan Farm Land Security Board allowed CPPIB to buy 115,000 acres in 2013 on the basis that its corporate structure was unique.

"We'll need to maybe think about cleaning things like that up," Stewart said. Closing the CPPIB's investment loophole "will be one of the things that will be considered for sure."   Continued...