UNDER PRESSURE: Dream homes competing for valuable farmland

Land prices in the Fraser Valley have reached the point where a recent report suggests farming 'becomes questionable'

Farm prices have increased substantially

Brewing local beer is one thing. Growing it in the Fraser Valley is quite another.

On a hot June morning, Dwayne Stewart chugs along in a tractor at two kilometres an hour, planting seeds that will grow into 25-foot-tall vines from which sprout hops, an ingredient that plays key role in the flavour and character of beer.

Stewart grew up on an Abbotsford dairy farm and studied at the University of the Fraser Valley. Earlier this year, some 15 years after his parents sold their dairy quota and abandoned full-time farming on their Sumas Prairie land, Stewart’s BC Hop Company and its investors purchased the property.

The company has also partnered with other farmers, and now has around 60 acres in production on five different properties. But despite an appetite for expansion, Stewart now finds himself butting up against the reality of operating in a province with strict rules about the use of farmland – and sky-high land prices.

The company bought his parents’ land for market value: around $75,000 an acre.

“When you have land going for between ($80,000) and I’ve heard as high as $150,000 an acre – ALR farmland – it’s incredibly difficult to find a crop that will pay for that land.”

Stewart is hoping hops will be that crop, and he’s looking to expand further, but doing so won’t be easy.

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Statistics Canada puts the average cost of land in B.C. at around $5,000 per acre, and Farm Credit Canada’s most recent Farmland Values Report says B.C.’s agricultural land increased in value by a modest 6.5 per cent last year. But other data suggest a much more challenging landscape for would-be farmers in Abbotsford.

A recent report by Vancity Credit Union found the price of a typical acre of farmland in the Fraser Valley ranges from around $60,000 for a larger chunk of land, to upwards of $100,000 for smaller, five-acre parcels.

And a survey of Abbotsford farm properties recently listed online confirm those prices, with a 20-acre blueberry farm with no buildings being sold for $94,500 per acre.

Those figures are significantly less than in Metro Vancouver, where farmland can go for $300,000 an acre, but still high enough to make farming a risky financial bet – Farm Credit Canada says farming becomes questionable when prices reach around $80,000 an acre.

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In B.C., farmland is almost exclusively found within the Agricultural Land Reserve (ALR), which was established more than 40 years ago to halt the runaway building of subdivisions then threatening to gobble up all of the province’s prime growing property. Although some rules have changed over the years, in general the regulations dictate that ALR land should only be used for farming and practices that support farming.

By preventing development and subdivision of farmland, the aim is to preserve the province’s stock of agriculture land and prevent speculation. While municipalities can change zoning rules with a simple vote by the council of the day, removing a property from the ALR is a more-difficult proposition and relatively rare. The result is that homebuilders who would otherwise be able to outbid farmers for pieces of flat, easy-to-build-on land don’t even bother looking at such properties.

But even with developers, industry and institutions like school boards and municipalities taken out of the equation, there is still a market for farmland at prices few farmers can afford.

The Vancity report suggests agricultural land is increasingly being purchased by non-farmers for its residential value, since the ALR’s rules allow a home on each farm property.

With home and land values skyrocketing across the region, local property listings suggest the Fraser Valley’s proximity to non-farm jobs, the lure of the open space of the country, and cut-rate property taxes are all spurring demand for agricultural land from non-farmers.

This spring, 22 acres of Bradner farmland off of Mount Lehman Road glowed with potential in a rugged area of west Abbotsford. The land – flat and mostly clear of trees, with two large fields that have previously grown crops – was protected by the ALR.

But the large For Sale sign on the corner didn’t mention the word “farm” once, and instead blared: “Excellent site to build your mansion” and “Easy access to Vancouver.” The property has since been re-listed, with the new agent advertising the site as the perfect place to house an agri-business or a dream home.

Elsewhere, one 26-acre property listed for $1.8 million began with: “Build your dream home near town with mountain view. Property has own well, septic, (underground hydro, cable, telephone on lot) and paved driveway. Great for farming /truck parking.”

The parking of commercial trucks is a prohibited use in the ALR.

A $1.9 million listing for a 20-acre blueberry field with no building on site concludes with: “This field awaits your dream home just the way you want it.”

Other listings coyly hint at the potential for the farmland to be converted.

One 26-acre property, listed for $2.4 million, noted its proximity to a residential subdivision and suggested it would be an “ideal farming property to buy and hold,” that “is poised to have an excellent return down the road.”

While the rules that govern the ALR prohibit non-farm uses, they can’t force a homeowner to plant crops. That means that once a home is built, the new resident can plant a large lawn, finely landscape their new spread, or just let nature take over their property.

Others only nominally use their property for farm purposes, making just enough to qualify for a break on their property taxes.

Asked about such uses of farmland, Agriculture Minister Norm Letnick told The News,  “Many people put things into advertisements that don’t come true. If anyone is buying agricultural land, it is my hope that they are buying it to farm…”

Vancity notes that nearly one-third of the Metro Vancouver farmland is leased, not owned, by farmers.

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Across the city, hundreds of parcels of land within the ALR are not being used for farming, according to a recently released inventory of land conducted by the Ministry of Agriculture.

The inventory was conducted in 2012, but only published last November. It suggests that less than two-thirds of all ALR land is actively farmed. That’s a dramatic decrease from 2004, when an inventory found 81 per cent of the city’s ALR farm was actively being farmed.

That 2004 inventory found 21,205 hectares were actively being farmed. Eight years later, the number had dropped significantly, to 19,599 hectares, a decrease of 7.5 per cent. When actual land cover was considered, only 17,380 hectares, or 63 per cent of all ALR land, were in farm use.

The new inventory also found much of the unused land had real farming potential.

The 2004 inventory had found only 1,911 hectares of farmland that could be brought into agricultural production. Eight years later, sureveyers discovered 5,331 unproductive hectares – 19 per cent of all ALR land in the city – that had farming potential.

Some of that land is tied up as parkland, wetlands and transportation uses, and some is being used illegally, while some parcels predate the 1972 creation of the ALR and thus aren’t governed by its rules.

But more than half of that unused farmland is being used legally – but unproductively – for homes, the inventory found. On mixed-use parcels – where residents live next to active fields or other agricultural uses – homes take up 1,628 hectares. But no farming at all is taking place on nearly 1,000 properties. Those properties occupied a total of 2,505 hectares – more than nine per cent of all the land in the ALR in Abbotsford.

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The city is currently looking at revamping its agricultural land use policies through a process it’s calling AgRefresh.

That process includes an extensive audit of all the city’s farmland. Its final stage, next year, will see council presented with options to address the survey’s findings. City manager George Murray said the findings of the survey, along with staff recommendations, will then be presented to council for action.

Recently, Mayor Henry Braun suggested hundreds of properties in the ALR aren’t operating in compliance with the rules. It will be up to council to figure out how to get those properties on side, and to set priorities for staff.

But the city’s hands are tied with respect to provincial rules that closely guard how land in the ALR is used.

A report for Metro Vancouver this spring suggested the regional district ask the province to increase the farm status threshold to make it more difficult for non-farmers to receive property tax breaks.

With the survey information in hand, Murray said they’ll also be able to ask the province to change its rules, if they so choose. But he said until the information is gathered, the city doesn’t plan on lobbying the province to change its farmland rules.

Agriculture minister Norm Letnick told The News that the province wants to increase the amount of farmland in production, and said the best way to do so is to “help farmers make money on their land.”

He noted that farm gate sales had increased over the last decade, and that helps growers. Asked, though, about why such increases have coincided with farmland being taken out of production in Abbotsford, Letnick said stakeholders will be discussing the issue at a conference on food security later this year.

“I’m sure that topic will come up.”

He also noted the province has also increased the budget for the Agricultural Land Commission to enable it to hire more enforcement officers.

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While the consensus is that the best land is still being used as farmland, the scarcity of such properties means competition is fierce and some are never even publicly listed.

Just over the U.S. border, in Sumas, farmland can be bought for a fraction of B.C. prices, with asking prices well under $15,000 an acre for prime farmland.

And for those like Stewart who are growing crops, the high land prices are forcing them to look for secondary uses for their land. The BC Hop Company hosts events like July’s BeerBQ, a combination craft beer and barbecue festival, and its popular BC Hop Fest. Others host weddings and other events, although those activities are also limited by ALR rules.

High land prices combined with the ALR’s land-use restrictions put farmers at an instant disadvantage against competitors elsewhere, Stewart said. Dairy and poultry operation that exist within the quota-driven supply management system are relatively stable, but extremely difficult to break into. And there is recent anecdotal evidence that dairy farmers are moving to the Interior for cheaper land.

“The real estate in the Lower Mainland is now in an unsustainable place for traditional, non-supply-managed farmers,” Stewart says. “The value of farmland in the Lower Mainland versus anywhere else in B.C. or Alberta is not comparable.”

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Forty-three years after its creation, the ALR has shaped Abbotsford in ways big and small. It has preserved hectares of land for farmers, limited sprawl, and allowed a growing Abbotsford to maintain a balance between city and country. But a host of challenges are confronting this keystone of B.C. life. Over the next several months, the Abbotsford News will take a closer look at the reserve and its wide-spread effect on life in Abbotsford. Watch for the next piece in August.