Agricultural Crown land leases to be awarded by tender

Details

Published on Friday, March 16, 2018

Photo By Kate Jackman-Atkinson. The process by which long term leases for provincial agricultural Crown lands are awarded is changing this fall.  Under the new Agricultural Crown Lands Leases and Permits Regulation, which came into effect Jan. 1, 2018, leases for hay and grazing Crown land will be awarded by a tender process. The provincial government is looking for feedback from the livestock industry until April 6.

Kate Jackman - Atkinson
Neepawa Banner & Press

Across Manitoba, 1.45 million acres of provincial Crown land is rented by livestock producers for hay and grazing. Starting this year, the process by which that land is rented and how it’s priced will change as part of the provincial government’s efforts to modernize access to agricultural Crown lands.

The mandate of the Agricultural Crown Lands (ACL) Program is to support the sustainable expansion of the livestock herd in Manitoba; to contribute to ecological goods and services and to provide mitigation and adaptation to climate change. “The ACL Program recognizes the value of agricultural Crown land as a public asset – agriculturally, environmentally, economically and socially. It focusses on the appropriate use of agricultural Crown lands to achieve its goals,” said the department in a consultation document released last month.

New rules Jan. 1, 2018

Last December, the provincial government announced that changes would be coming to the Crown land system to better comply with trade agreements and reduce red tape. On Jan. 1, the newest Agricultural Crown Lands Leases and Permits Regulation came into effect and all long term leases awarded in 2018 will fall under the new regulations.

Historically, long term leases were awarded based on a point system, which gave applicants points for characteristics such as age, existing land holdings, number of livestock owned and proximity of the parcel of land for rent. The applicant with the most points was awarded the lease. Under the new regulation, leases will be given out based on a tendering process, something which is already in place for the 11,000 acres of agricultural Crown land under lease for cropping.  Agriculture minister Ralph Eichler said a tendering system will ensure that prices paid by producers for leases and permits more accurately reflect market values and will be more transparent. The new tendering system is to be in place this fall.

Updating the ACL program has been an ongoing project for Manitoba Beef Producers, the organization representing cattle producers in the province. President Ben Fox said, “I’m happy to see the changes,” adding, “[They] will create transparency for producers to see how the system works… tendering should benefit all producers.” Fox explained that changes to the program, in particular how leases are awarded, were overdue. Removing the point system, he said, will make a much more streamlined and transparent process.

Non residents can apply

Another big change in the new regulation is expanded eligibility. As of Jan. 1, leases are open to Canadian citizens and permanent residents, not just Manitoba residents, as was previously the case. Such a change was said to be necessary to comply with trade agreements, such as the New West Partnership and the Canada Free Trade Agreement.

Greg Nesbitt, MLA for Riding Mountain, said that a move to a tender-based system is necessary, “The use of a tender process for setting the forage rent will ensure that Manitoba is using a fair market-based rental rate that will stand up to potential trade challenges from all of our domestic and international trading partners.”

Consultation process

While the new regulations came into effect on Jan. 1, there are still some details to be finalized. Last month, Eichler announced that the government has launched a consultation process to ensure that the changes include input from the livestock industry, while improving fairness and transparency in the system. The consultation process has included stakeholder meetings and written comments will be accepted until April 6. According to a spokesperson for Manitoba Agriculture, the consultation process will help the department develop policies to support the regulation, focusing on the eligibility policy, as well as what the tendering process might look like when implemented this fall.

Constructive Discussions

Eileen Clarke, MLA for Agassiz, explained, “Since its proposal in December, there have been constructive discussions in Agassiz concerning changes to the Agriculture Crown Lands Leasing and Permits Regulation. These proposed changes will allow for continued dialogue, provide transparency and deliver a modernized approach to the management of these Crown Land Leases in rural Manitoba.”

The consultation document explains that Manitoba Agriculture is committed to the modernization of the ACL program to achieve six goals: facilitating interprovincial trade; increasing transparency and accountability of ACL program administration for the management of agricultural Crown lands as a public asset; contributing to red tape reduction by ensuring the program is administered in an efficient, effective manner; contributing to provincial economic growth by helping to expand the livestock industry; ensuring appropriate use of Crown lands to optimize agricultural potential, while maintaining landscape stewardship; and recognizing innovation in agriculture at all levels, including hay and rangeland management practices.

Feedback from the consultation process is expected to help shape the details of the new policy. These details include how the tender process will be carried out, what eligibility potential leaseholders must meet, term length, lease holder rights related to renewals and improvements, development of a forage tender process and a potential minimum price. The consultation process is also looking at questions such as restrictions on how much Crown land a person may have under lease or permit and whether alternate management practices, such as subletting, custom feeding, custom grazing, livestock leasing or hay sales, will be allowed on Crown land.

As for the details still to be finalized, Fox said that he and other producers know what they’d like to see. “I would be in favour of an all out auction… It would be the simplest and most fair,” he said, adding that he has heard from a number of producers who also favour this method of pricing and allocating Crown land. As for the tender system, Fox feels that it has some downfalls, though allowing applicants to re-tender might solve some of the problems.

Pricing to reflect market values

Under the new regulations, for long term forage leases, the price for the first five years will be set by public tender. After the initial five years, the price for the rest of the term will be based on  a formula taking into account market cost of the land and its annual forage capacity. What exactly the tender system will look like, and how it will be implemented, are still to be determined.

Pricing changes will also apply to existing leases, though not right away. Rental rates for forage leases with a term that began before Jan. 1, 2018 won’t change until 2020. On Jan. 1, 2020, leaseholders will begin paying a market based rental rate.

In 2016, Eichler set a goal of roughly doubling the province’s cattle herd. A spokesperson for Manitoba Agriculture said that the changes aren’t directly aimed at meeting this goal, however, they are expected to support the growth of the livestock industry through a more efficient and sustainable use of available agricultural Crown lands.

Some stakeholders have raised concerns over the potential for non-compliance with the lease terms or enforcement challenges with out of province leaseholders under the new rules. Because the policies must still be developed or updated based on feedback from the consultation process, a spokesperson for the department of Agriculture said that it’s too early to speculate on changes to the program’s budget. However, she said that the shift to a tendering process is expected to allow field staff to allocate more time to land management extension activities to ensure compliance.

While many beef producers or existing Crown land leaseholders have taken part in stakeholder meetings, others haven’t had a chance to take part in the consultation process. Fox said, “It’s extremely vital” for those people to provide feedback, either as a written submission or through their Crown lands office.

Clarke also stressed the importance of participating in the consultation process, “Public consultation is very important and this is a real opportunity for local, ground level input. Our government wants to hear from Agassiz producers and encourage their feedback through the Manitoba Agriculture website.”

Nesbitt said that he hasn’t directly heard any feedback from constituents, but said that the changes will have a positive impact on producers. “Manitoba farmers will continue to have access to agricultural Crown Land, enabling the ongoing production of forage for the livestock industry,” he said, adding, “The Agricultural Crown Lands Program supports the sustainable expansion of the livestock herd in Manitoba.”

“I really believe that if implemented properly, [the changes] will do nothing but help the beef herd and help producers be better,” said Fox. He sees proper implementation involving “less regulations and less involvement”.  He added that the rules should allow producers to manage their holdings as they fit,  with checks and balances and repercussions for those who don’t uphold the rules