By Martin Straathof, Executive Director, Ontario Farmland Trust
At the Ontario Farmland Trust (OFT), we deeply appreciate the work of the Canadian Agri-Food Policy Institute (CAPI), an organization that continues to bring rigour, insight, and relevance to some of the most pressing challenges facing Canada’s agri-food sector. Their recent report, The Economics of Farmland Use, Farmland Values and Returns and Futurability, authored by Courtney Anderson, is no exception.
This report is a timely and critical contribution to the conversation around farmland use and protection in Canada. At OFT, as an organization that works to permanently protect Ontario’s finite farmland, it affirmed much of what we see on the ground every day, offering new data to support our work in protecting Ontario’s agricultural lands for future generations.
The report, based on three decades of Census of Agriculture data, paints a nuanced picture of farmland economics across Canada. While farmland values have soared over the past 30 years, this appreciation alone does not translate into economic viability for farmers, especially in regions like Ontario, where development pressure has inflated land prices far beyond what farm incomes can support.
Key insights from the report include:
- Ontario and British Columbia have the lowest capitalization rates in the country, revealing a growing disconnect between farmland values and how much farmers can earn from the land.
- Return on investment from renting or farming land in Ontario is below the national average, due to high land costs and low farm-level returns.
- Rising competition for farmland rentals is putting significant pressure on new and young farmers, with rental rates now nearing 90% of net farm operating income per acre.
As a land trust working to keep farmland in farming, OFT sees firsthand how the speculative value of land is crowding out viable agricultural use. CAPI’s findings validate the need for new, regionally grounded strategies that keep farmland affordable and accessible.
Here are a few takeaways we’re reflecting on:
1. We Need to De-Couple Farmland Value from Speculative Pressure
This report confirms that in Ontario, land values are increasingly shaped by non-agricultural forces. OFT’s use of conservation easements, long-term leases, and new land access models directly responds to this challenge by keeping land affordable and in active production.
2. Renting Isn’t a Long-Term Solution
The strong correlation between rental rates and farm income underscores how difficult it is for new farmers to get ahead. OFT’s development of a Farmland Access Program is one solution to provide pathways to stability, equity-building, and eventually ownership. We are nearly ready to launch our first intake of the Farmland Access program on our newly acquired farm in Tiverton and have partnered with the Kawartha Land Trust to develop a revolving fund to support land acquisition that further lends support to land access.
3. We Need Localized Policy and Data
CAPI’s analysis shows just how different the economics of farmland are across provinces and even within regions. It reinforces our push for municipal- and county-level data and planning tools that reflect local realities and support evidence-based land use decisions. This is why OFT has joined Dr. Asim Biswas’ research project that will quantify land use changes in real-time using satellite data and then quantify the types of soil and land loss that happened in the past 30 years across the counties. We have also partnered with Dr. Sara Epp to deliver a course, Planning for Agricultural Conservation, in the Rural Planning and Development program to help our next generation of land use planners understand the importance of local and provincial policies for farmland protection.
4. Farmland Shouldn’t Have to Earn Like a Stock
We were especially struck by the report’s observation that even with 580% growth in land value over 30 years, farmland still doesn’t meet the risk-adjusted returns expected by institutional investors. And that’s okay. Farmland shouldn’t be treated solely as a financial asset. Farmland should not be seen as just a financial investment. It’s a food security asset, a climate solution, and the foundation of our rural communities. Maintaining land as farmland and preventing its conversion to non-agricultural uses is seen as a public benefit, which is exactly why agricultural land was added to the Conservation Land Act (1990) in 2005 and why owners of farmland receive charitable tax receipts when they place a farmland conservation easement on their property.
CAPI’s report equips us with data to advocate for smarter land use policies, new funding models for farmland protection, and support systems for the next generation of farmers. It also reminds us of the critical importance of ongoing investment in farm-level data and research capacity in Canada.
We are deeply thankful to CAPI and Courtney Anderson for this important work, and we encourage everyone in our sector to read the report and reflect on what it means for their region, their policies, and their future.
Interested in learning more about our reflections regarding farmland policy? Explore OFT’s Farmland Policy page.