Succession Planning and Farmland Easement Agreements
Welcome to part two of our blog series on the farm succession crisis in Ontario. In part one, we talked about the factors causing the farm succession crisis, including the farm income crisis, the rising cost of farmland, and farmers’ lack of access to resources they need to help guide them. These factors combined have contributed to the farm succession crisis, and are part of the reason why, in Ontario, there are more farmers over the age of 60 than under the age of 35 (Statistics Canada, 2011).
Now that we have explored why the farm succession crisis is happening, let’s talk about a tool that can help farmers navigate the succession process even if they do not have a successor: Farmland Easement Agreements.
Farmland Easement Agreements are the strongest tool available to farmland owners to ensure that their farmland will be protected, no matter who owns it in the future. Farmland Easement Agreements are permanent, legally binding agreements that landowners enter with the Ontario Farmland Trust (OFT), and that are registered on the title of the land. Once registered, these agreements will run with the land, and apply to all future owners of the property. So, even if the land is sold, it is guaranteed to remain as farmland forever.
Farmland Easement Agreements can help during the succession process in a number of ways.
If there is no successor lined up to take over the farm, easements ensure that no matter who buys the farm next, the land will remain available for agriculture. This means that the land will never be lost to non-agricultural development such as urban sprawl or aggregate extraction.
Another way Farmland Easement Agreements help with succession planning is by making farmland more affordable for the next generation. When developers buy the land, they are able to pay more than a new farmer who is just starting out, and that young farmer may be outbid. With a Farmland Easement Agreement on the land, developers are not as interested, and the price of the protected farmland is more likely to remain attainable for the next generation of farmers.
While every farm that is protected with a farmland easement is protected forever, each easement agreement is unique, and OFT works with the landowners to ensure that it meets their needs. If you would like to learn more about easements to determine if they could play a part in your succession plan, click here.
For more resources to help guide you through your farm’s succession, check out this guide from the NFU-O here.
Statistics Canada. 2011. Census of Agriculture. Retrieved from https://www150.statcan.gc.ca/n1/pub/96-325-x/2014001/article/11905-eng.htm