Harry and Susan want to keep the farm intact. Their solution is to convey it to their neighbours. As well, they want to help Luke pay off his tuition bills. They approached Nathan Heppner, a certified financial planner, and Erik Forbes, a registered financial planner, both of Forbes Wealth Management Ltd. at Carberry, Man., to develop a plan for transferring the farm to future ownership and management while ensuring the continuity of their retirement income.

Harry and Susan live modestly. They spend just $4,000 per month. They have no debts and want to continue living as they do now when retired.

Their retirement assets total $780,000 composed of two tax-free savings accounts (TFSAs) with a total value of $280,000; Susan’s $75,000 RRSP; her $35,000 locked-in retirement account (LIRA); and $390,000 in non-registered investments. Assuming they can generate a 6.54 per cent rate of return and allowing for a 2.1 per cent rate of inflation and combining that cash flow with their Canada Pension Plan and Old Age Security benefits, they can make their target, Heppner estimates.

The more complex part of their dilemma is how to handle the generational transfer of their farm. However, sale for top dollar is not their concern. They will have sufficient funds for retirement, Forbes notes.

Let’s do the math. Harry and Susan bought their land for $1,115,000. The present total estimated value of their eight quarters is $3,840,000. If they can sell for that price, they could have a $2,725,000 capital gain. They have a lifetime capital gains exemption as follows:

• Market value: $3,840,000
• Book value: $1,115,000
• Capital gain: $2,725,000

Take off their combined lifetime capital gains exemption, $2,500,000, for a net capital gain of $225,000, and allow a 50 per cent inclusion rate. The result is taxable income of $112,500.

There are tax issues, Heppner notes. Canada has no estate tax, inheritance tax nor gift tax, but there is a tax liability on the $112,500 capital gain. Harry and Susan would gain nothing by selling the land to neighbours at less than fair market value. Any disposition of the land would leave the capital gain as a liability.

What to do?

If they gift the land to neighbours, there would be tax liability and payment would erode their retirement capital. If they gift the land at book value, they could not make use of their lifetime capital gains exemption. If they gift the land at less than fair market value, they would be double-taxed by the Canada Revenue Agency. And if they make use of an imaginative solution to defeat the Income Tax Act, CRA could apply the General Anti-Avoidance Rule and related penalties.

The planners recommend sale of the farmland to the neighbours at fair market value. That allows Harry and Susan to use their lifetime capital gains exemption. The neighbours lack cash for payment in full but Harry and Susan can use a vendor take-back via a promissory note for the full value of the land. The promissory note is a private mortgage on the land. It would have to be accompanied by a schedule of payments — say, $50,000 per year indefinitely. In a bad year, the agreement could allow for deferral of payment. When Harry and Susan have sufficient payments, they can elect to stop future payments or even cancel the loan.

There is flexibility in this plan. If the neighbours decide to sell the land, they would have to pay back anything outstanding on the loan. The administration of the loan would be in the hands of Harry and Susan. They could even draft a provision forgiving the loan when one or both die.

“The couple’s life of dedication and diligence has put them in a great financial position,” the planners explain. “They can achieve their retirement goals.”

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They anticipate some serious tax to pay, for land values have risen from $500 per acre, when they bought their farm, to $6,000 today. They did not do any tax planning for the day they might have to dispose of the farm. As a consequence, they face a hefty tax bill. We asked Nathan Heppner and Erik Forbes, both experienced financial planners with Forbes Wealth Management at Carberry, Man., to look into the couple’s situation.

Tax is not the only problem, Heppner and Forbes explain, for Steve and Lou are likely to need financial help. The way to do that is by holding down tax due on sale and maintaining money for their sons.

Let’s look at the tax problem in detail:

Purchase cost: $500 per acre

Sale price: $6,000 per acre

Total acres for sale: 800 (five quarter sections)

Capital gain per acre: $5,500 ($6,000 – $500)

Total capital gain: $4,400 (800 acres x $5,500)

Lifetime capital gains exemption: $2 million ($1 million each — if each qualifies, that is, and exemption not previously used)

Net taxable gain: $2.4 million ($4.4 million less $2 million)

Capital gains inclusion rate: 50 per cent

Taxable capital gain: $1.2 million

Assuming a 50 per cent average tax rate, Jack and Mary could owe $600,000 in tax. That’s a big hit to their retirement funds. There will also be some alternative minimum tax to pay, that is really a prepayment of postponable taxes.

What to do?

Contribute to RRSPs. That is at best a modest deferment of tax, given their ages.

• Invest in tax-sheltered assets such as dividend-paying stocks eligible for the dividend tax credit.

• Donate cash or securities to registered charities that issue tax credits.

• Withdraw funds from non-registered accounts slowly, so as to preserve their Old Age Security from clawbacks.

What to have done?

Looking back at what the couple could have done, there were ways to avoid high taxes on disposal of the farm. These include:

• Use of life insurance to provide tax-free retirement cash.

• A crop share or rental agreement rather than outright sale.

• Having sold land in stages over many years to spread the tax liability. Gains at sale would have raised the couple’s tax brackets and taxes due and therefore raised their exposure to OAS clawbacks.

• Put their land into a corporation. That would have preserved their lifetime capital gains exemption for successive years and allowed gradual drawdowns of corporate assets.

That would have added complexity, but it would have been cost-effective, Forbes and Heppner conclude.

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The governments of Saskatchewan and Alberta used to publish surveys on land leasing in the two provinces. The last time that happened was 2019, so rental rates in those publications are out of date and under-valued.

For instance, in Red Deer County in central Alberta, the survey found cropland leasing rates were around $75 per acre.

Renting that same farmland could be 40 to 50 per cent more expensive in 2025, but it’s difficult to even make a guess because land rents are a “dark market,” said Darren Bond, a farm management specialist with Manitoba Agriculture.

“We do have some rules of thumb, but it’s all dependent on the area,” he told Country Guide in 2024.

One rule of thumb is rent versus land values. In a report published last year, Farm Credit Canada found the ratio of farmland value to rent is around 2.5 per cent.

That percentage varies by province, but it’s a rough gauge to understand if farmland rents are pricey or cheap. If the average cropland value in a region is $4,000 per acre, then a reasonable rent could be $100 per acre.

Land values exploded in many parts of the Prairies from 2020 to 2024. FCC data show Saskatchewan farmland prices increased 41 per cent from 2020 to 2023. In northeastern Saskatchewan, cropland increased 10, 15 or 20 per cent every year.

For a while, in 2022 and parts of 2023, renting was possibly a bargain compared to buying farmland in certain regions.

“At this point in time, from my conversations … (rental rates) have now caught up,” said Bond, who spoke with landlords from across Manitoba last fall.

Land rental rates could be important in 2025 as grain producers deal with lower grain prices and relatively high input costs.

Using canola as an example, the operating costs of growing canola is around $418 per acre, Manitoba Agriculture said in its 2025 cost of production guide:

If rent is $110 per acre, the cost (not including machinery or labour) rises to $528 per acre.

Assuming canola is $13.50 per bushel, 39 bu./ac. is the break-even yield for growing canola on that rented land. A favourable rental agreement could be the difference this year in a profit or loss.

Despite the amount of money involved, a percentage of land leasing is still done through handshake agreements. Some experts warn that producers and landlords should instead have a written agreement, which provides security for both sides.

Others say it’s crucial to maintain a personal relationship with a landlord.

“Get in the truck, go drive to their house, sit down with them, have coffee, have a meal, have a drink, block the afternoon off,” Ted Cawkwell, a farmland realtor in Saskatoon who runs the Cawkwell Group, told Country Guide.

“It’s going to be pretty hard for them to leave if they feel like you’re their friend. Even if the neighbour offers them more money, my guess is if you’ve built that relationship, it’s not going to matter.”

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Across the Prairies, some of the toughest farmland is getting a second look, not for what it can grow, but for what it can support. Instead of battling poor soil and disappointing yields, farmers are being offered real money to turn marginal acres into something more sustainable. Groups such as Ducks Unlimited Canada (DUC) and the Prairie Precision Sustainability Network (PPSN) are stepping up with incentives that make perennial forage a viable, profitable, alternative.

Seeding marginal cropland into perennial forage helps conserve soil health, reduce erosion, and improve water retention. It also provides habitat for wildlife, particularly waterfowl, and helps improve biodiversity. Additionally, it enhances carbon sequestration by stabilizing soil with deep-rooted plants, supporting long-term environmental sustainability. It’s easy to see the appeal for conservation groups.

These incentive programs for marginal acres are relatively new. DUC began offering compensation to farmers for seeding unproductive cropland to perennial forage in 2019. PPSN began offering farmers support to convert marginal acres to perennial forage in 2024.

But while the incentives are recent developments, the problem of what to do with less productive areas of a farm are as old as agriculture itself. Darren Bond, a farm management specialist with Manitoba Agriculture, says farmers can make better decisions by considering the specific restrictions posed by different field conditions — such as susceptibility to drought, excess moisture, or soil compaction — that impact crop yield.

“Better land has fewer restrictions, and more marginal land has more restrictions,” Bond says. “Those restrictions would be things like being more susceptible to excessive moisture, excessive dryness or excessive stoniness, things that limit yield potential.”

Unfortunately, there is no exact science to determine those marginal acres. Sometimes factors such as favourable weather conditions and low disease or insect pressure may temporarily mask a problem. A farmer might get an excellent crop two or three years in a row after a run of good growing conditions and may assume that trend will carry on. But over the long term, that same parcel of land could drop below the profitability line more often than not.

“With land that’s a little bit more marginal, the yield swings can be a little bit higher,” Bond says. “So it does make it a little bit more difficult to make that decision.”

Another factor impacting the decision-making on marginal land is the cost of production. For the past year or two, farmers have been feeling the pinch of tight margins. Input costs have come down a bit over the last several months, but crop prices are remaining stubbornly low. Bond says farmers should expect that climate to continue.

“With tighter margins, the land that doesn’t produce as much is going to feel that squeeze sooner, a lot sooner than your average land,” he adds.

READ MORE: Bless your mess: Crops may not be best for underproducing acres

Bond also points out that when calculating costs of production, it’s important to factor in the time the farmer puts into managing that parcel of land.

“Maybe producers’ time would be better spent seeding that down to perennial forage and managing their other acres more intensely,” he says.

It’s complicated, but the tools are there to track yield and understand costs of production. Bond points out that having a clear view of what that land can produce will create a foundation for looking at what else could be done with the land. If a parcel of land is consistently underperforming, regardless of incentive, switching to perennial forage could be the right decision. It’s just a matter of roughing out the yield potential and profitability of that scenario and comparing it against staying the course.

“At least put numbers to the decision and try to take out some of the variables,” Bond says. “It could be the incentive is what pushes the decision over the edge.”

Ducks Unlimited Canada Marginal Lands Program

That’s certainly what the folks at Ducks Unlimited are hoping for. And the incentives they’re paying are significant. Their per-acre payment differs from province to province. In Manitoba, they’re offering $200 per acre; in Saskatchewan, it’s $135 per acre; and in Alberta, the incentive is $150 per acre.

Daphne Appleyard, DUC’s marginal areas specialist for Manitoba, says the conservation organization is focusing its efforts on the Prairie Pothole Region, which, in Canada, stretches across southwestern Manitoba, southern Saskatchewan and into Alberta.

“The region contains important natural habitat, including wetlands and upland, which improve soil health, water quality and biodiversity,” Appleyard says. “Conserving natural areas has also been shown to increase crop yields due to increased pollination and provide resilience during extreme weather events.”

In a press release pitching the benefits of the Manitoba marginal areas program, DUC says most farmers in southwestern Manitoba have to contend with marginal acres.

“The numbers are higher than you might expect,” says Sam Robinson, a research scientist who studies sustainable agriculture for DUC. “Common causes of marginal acres are too much or too little water, extra salinity and soil compaction.

Using data from Manitoba Agriculture’s 2025 Cost of Production Guide, DUC estimates the cost of growing red hard spring wheat at $350 per acre. At $8 per bushel and a yield of 65 bushels per acre, the profit is roughly $170 per acre. But in areas with mild salinity, where yields drop to just 45 bushels per acre, profit is reduced to only $10 per acre after input costs. In extreme cases, the cost of production exceeds any potential profit

“A farmer seeding wheat or canola into extreme saline areas could lose up to $418 per acre,” Appleyard says. “Fortunately, seeding those marginal areas to forages is a proven way to fix saline and weed issues. Plus, the forages can be used for livestock feed or sold, which increases the profitability of that land.”

Robinson notes weed infestations can also turn productive farmland into marginal farmland.

“We’re seeing herbicide resistance in kochia across the Prairies,” he says. “Some farmers will even do a chemical fallow, tilling the soil and applying herbicides with strong residual effects. This costs more time and money. The better solution is to have permanent cover in place that will compete with the weeds.”

The Prairie Precision Sustainability Network

PPSN’s incentive program is the second stage in a two-phase study that looks at marginal agricultural areas across the Canadian Prairies. In phase one, farmers provided their precision yield data, which helped create a detailed map of marginal acres and identify areas where conversion to perennial forage could be most beneficial.

The first phase is continuing, and the second phase, which launched in 2024, is going back to those farmers and asking them to convert those less-than-productive acres into perennial forage.

The PPSN began as a collaboration between research teams at the University of Saskatchewan in 2022, but since then the Universities of Manitoba and Waterloo have joined the effort.

Heading up the PPSN research team is Paul Galpern, associate professor of ecology and evolutionary biology at the University of Calgary. He says convincing farms to sign on to the second phase isn’t a difficult pitch — particularly since they’ve all participated in the first phase. They already have data showing the land in question is losing the farmer money. It’s really just a matter of pointing that out and suggesting they take a break.

“Let’s see if we can plant that in perennial forages. Firstly, you’re going to stop losing money, but secondly, you’re going to have an opportunity for soil rehabilitation and carbon sequestration,” Galpern says. “Those long roots of those plants are going to store carbon under the soil. They’re also creating habitats that could be great for beneficial insects in their surrounding field. It’s a win-win.”

Farmers who sign on to phase two of the PPSN program stand to benefit from a variety of incentives designed to support their transition to perennial forage. First, participants will receive a one-time signing bonus for their involvement in the preliminary year of testing.

Once the conversion is complete, they’ll be eligible for a land use payment of $75 per acre each year for the first two years, with the potential for additional payments depending on available funding. PPSN will also fund the forage seed and provide advice on best management practices to ensure the success of their new perennial crops.

‘Stackable’ benefits

The good news for farmers is that the PPSN incentive program is ‘stackable,’ meaning that farmers can combine it with other programs such as the DUC program to maximize their incentives and financial support.

Galpern points out that PPSN has been partnering with DUC since phase one of its project — and says he will tell participating farmers to give DUC a call.

“We’re making a change here that is completely aligned with Ducks Unlimited’s marginal areas program,” he says. “And if you go over to them, they’ll provide additional support to help you make this transition.”

There are other programs that farmers can stack as well. For example, PPSN is working with a company called Carbon Asset Solutions. Under certain situations, they will also pay farmers for converting to perennial forage, but with more of an eye to carbon sequestration.

“They’ll measure how much carbon you’re storing in the soil in the section of your field that you’ve changed, and they’ll use carbon offset markets to pay you for that carbon,” Galpern says. “It’s a really exciting new opportunity.”

Farmers participating in PPSN’s Phase 2 will receive information about all the compatible programs that offer incentives. According to Bond, programs like these could really simplify the decision-making for farmers.

“Including an incentive can reduce some of the uncertainty,” he says. “Any payments just make it a little bit clearer as to what you can see for returns.”

The post Use these incentives to improve the profitability of low-yield acres appeared first on Grainews.

Curtis Cavers, an agronomist with Agriculture and Agri-Food Canada based at Portage la Prairie, Man., says there are ways to boost crop productivity in these problem areas.

Cavers provided an assessment of several practices that can help, in a presentation he delivered at the Manitoba Agronomists’ Conference held in Winnipeg in December and later in an interview with Grainews.

More fertilizer

One obvious solution is to apply more fertilizer. Cavers says it’s one of the more effective short-term fixes for restoring productivity on eroded knolls. He notes it’s also relatively quick and easy for farmers to do, as it doesn’t require a big change in management practices.

The biggest drawback, however, is cost. Because fertilizer is expensive, Cavers says, “you want to make that as much of an informed decision as possible before you go and spend a lot of money on something like that.”

Cavers recommends testing the soil to see if additional fertilization will be effective. Farmers need to be aware that for some badly eroded soils —sandier soils or those with very little soil organic matter, for example — no amount of fertilizer is likely to restore its original productivity, he says.

In some instances, farmers may opt to not apply any fertilizer at all on eroded knolls, as a way to minimize their losses. However, he says, this can make it more difficult to improve these areas later, if that’s something they decide to do.

“If you are purposely shorting these areas for some nutrients, it’s going to be really hard to get a stand reestablished there.”

Farmers may also consider applying livestock manure to improve eroded hilltop areas; Cavers says solid manure especially is an excellent source of organic matter.

Some potential drawbacks include the risk of over-application and odours associated with livestock manure. He says the practice also requires patience, since it take time for the benefits of manure applications to be fully realized.

More seed

Because eroded knolls tend to be inhospitable for crops, it can be tough to get a good stand established in those areas after seeding, especially in dry conditions. Cavers says one possible solution for farmers is to crank up their seeding rates.

As Cavers points out, larger plant stands are more competitive against weeds, and they also help to reduce evaporation and store more moisture in the soil. The crop residues left behind at harvest also act to increase organic carbon in parts of the field where it’s needed most.

“Say you double your seeding rate in some of these cases, there’s a chance you’ll get a better stand in an area where more plants are needed to do that,” Cavers says.

READ MORE: It pays to adjust seeding rate based on moisture

When soils are really poor, however, increasing seeding rates may not make much difference.

“It’s going to be very site-specific from place to place, even from one hilltop to another in the same field. Some places are going to be more severe than others.”

Cavers notes cost is another consideration for farmers. “For less expensive seed, this might be attractive as a short-term fix. For some expensive seeds like canola, it may not be quite as appealing,” he says.

More water

Another fix Cavers cites is to supply more water to eroded knolls through irrigation.

“This can overcome a slew of limitations and setbacks, even in soils we would probably classify as not being particularly healthy,” he says. “If they’re kept moist and there’s a reasonable supply of water, they can produce crops better than one would expect.”

Cavers sees this as a more feasible solution for farmers who already have irrigated cropping systems in place than for those who don’t.

A big reason for that is cost. As Cavers points out, irrigation systems cost a great deal to install, and there are other considerations such as water availability and getting the necessary regulatory approvals. Also, not all farmland is suitable for irrigation.

“With some steeply sloping land or land that doesn’t hold a lot of moisture, now you’ve got to watch out for risks like salinization and runoff.

“Like a lot of things, we can recommend practices to make things better, but the devil is in the details. If you’re not careful, things could be made worse if you don’t check all of the possible outcomes.”

Redistribute crop residues

Cavers notes crop residues can be an important source of nutrients and organic matter and can also help to reduce evaporation and runoff and conserve moisture in fields. Redistributing these residues so there’s more of this material on eroded hilltops is another way to increase productivity in these areas.

Because crop residues are a readily available resource, this can be something relatively quick and easy for farmers to do if they have the right equipment.

He notes one method would be baling straw from lower parts of a field and transporting it to hilltop areas, where the material could be broken up and moved around. Cavers cautions, though, that putting down too much straw at the wrong time could do more harm than good.

“If you add too much, you can quickly make a mess of the seed bed and have problems develop because of that.”

Cavers says he believes a better method could be to focus on redistributing chaff instead, using equipment such as a chaff collection unit attached to a combine.

“Not many people have those, so you may not want to invest in that until you see if this concept has traction in your situation. You might be better even just to play around a bit at the start with your harrows,” he says.

Grow cover crops

Most farmers are familiar with the many benefits of cover cropping for improving the quality of soil, reducing runoff and conserving moisture in problem areas.

If that area is an eroded hilltop, though, Cavers cautions cover crops on their own may not be the ideal solution for producers aiming to restore productivity.

These are usually the driest and most difficult parts of a field to try to get any crop established, he says, which means producers need to have realistic expectations around growing cover crops there.

READ MORE: Cover cropping on the Prairies

Cavers says farmers shouldn’t expect to see a 100 per cent success rate with this practice, especially at first, and he maintains cover cropping is best used in combination with other methods for boosting productivity in eroded hilltop areas.

Move topsoil

Cavers is a proponent of landscape restoration, which involves moving topsoil from the lowest areas of a field where it accumulates over time and placing it in the highest areas where it’s needed most.

“You’re taking it from a place that could probably stand to have it removed and not have a major long-term negative impact,” Cavers says, “and then you’re putting it up on the hilltops where we hope it would have the biggest and longest-term positive impact.”

Since 2020, Cavers has been conducting field trials at several Manitoba sites as part of his research into the effectiveness of landscape restoration. His current practice is to scrape off six to eight inches of topsoil from low areas and spread it around on topsoil-deprived areas higher up.

Taking too big of a cut out of the low areas might create an artificial pothole where water will pond, though, so farmers wanting to try this practice need to be mindful of that. They should also be aware it can take a year or two for soil biological activity to be restored and for productivity to return to normal in areas where topsoil is removed.

Cavers recommends transplanted topsoil be firmed up a bit once in place on eroded hilltops and that farmers then avoid doing tillage in the affected area.

“Try and do what you need to create a nice seed bed and give crops you’re going to plant up there as much opportunity for success as possible,” he says.

“If you’re practicing low disturbance no till or you’re very strategic in how you till once you move that topsoil up to the hilltops, hopefully it will stay there as long as possible.”

Cavers notes it’s important to ensure topsoil used for this purpose isn’t taken from saline areas, because salinity will make it even more difficult for crops to become established.

According to Cavers, restoring the landscape this way results in an immediate increase in soil organic matter, and it can be a one-time practice if it’s done right.

But he says farmers still need to have realistic expectations; in really dry years, for instance, there won’t necessarily be a positive yield response.

“Again, I want to temper people’s expectations. It’s not like you’ll do it once and now you’ve got the same or similar yields up on top than you do at the bottom,” Cavers says.

“The potential is there, but it might take a year or two of things settling and just getting everything lined up and doing what it’s supposed to do.”

Cavers says he sees landscape restoration as kind of a foundational practice for restoring the productivity of eroded hilltops and increasing field uniformity.

“You get the soils fixed as best you can first, and you can then overlay a conscious tillage practice going forward, whether that’s low disturbance no-till or very strategic tillage,” he says.

“Then you can layer one of the other practices on top of that. Whether it’s residue management or cover crops or being more strategic with your inputs, these are all things you can do to tweak the situation so that you’ve got a better chance of increasing productivity.”

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Appraisal

Start with determining the FMV by using a certified appraiser. If you want to find a local appraiser you can ask your lender for referrals, and/or you can search up “agricultural appraiser.” One of the members on our membership site gathered two appraisals for her farm, so she was confident she had a good number to start the conversation of transition with her successor.

What is the nature of the farming operation and its size? Is it a large, highly profitable enterprise or a smaller family operation with marginal profitability? This is a viability question and relates to our coaching queries about how many families the farm’s cash flow or income stream can support.

What is the nature of the assets being purchased — is it actual farmland, equipment and buildings (infrastructure), or shares in a farming company? This is where a current asset list is helpful. Some folks are visual learners and to make good decisions they want to see data and facts. How much of the actual farmland is for crops or pasture? What kind of market value does the equipment have? Do the buildings need a lot of upgrading? How many shares in the farming company are available for purchase? By when? Are the shares growth shares for the next generation? Are the founders wanting preferred shares for future income? Do non-farming siblings have access to farm shares?

Family discount

The successor needs to prepare a business plan that can be presented to the finance company as part of an application, when determining how much the finance company is willing to provide toward the purchase.

There is always going to be a collateral requirement, which could be in the range of 20 to 25 per cent of the FMV. This may dictate just how much it is practical to expect as a family discount. As a young farmer, what kind of collateral are you bringing to the table?

Often discounts have a very wide range based on family dynamics; however, it’s not uncommon for the discount to be in the range of 15 per cent, which can lead to a shortfall of five to 10 per cent of the amount that may be available from financing. There are several ways that shortfall might be addressed, depending on the specific circumstances. For example, it may take the form of a promissory note to make up the difference. Due to the extremely high price of farmland, there is often a gifting component to enable a successor to take up the operation.

The other issue: what protections are there for the seller (founders), in the event of an early sale by the successor? One of several options may take the form of a graduated retention by the successor, in which they receive no advantage if they sell within one year, increasing as the agreement reaches maturity in 10 to 20 years (as determined by the parties).

ALSO READ: How to reduce the tax load on a farm succession

Lawyer Mona Brown in Manitoba has used the term “poison pill” to describe legal agreements which prevent the successor from farming for just a few years and then selling out. Brown uses a pro-rated agreement that protects other non-farm heirs from having a sibling who “cashes out” a farm in five years.

Remember, it likely took the parents 40-plus years to achieve what they have built up and it is not unreasonable for the successor to be looking at a long term for the purchase. (Keep the expectations realistic.)

For more on these topics, visit the Country Guide website for its November 2023 digital edition, called “This New Land: The Challenge of High Prices.”

Show your work

See the relationship manager at your local FCC, bank or credit union to share your current net worth statement, find appraiser referrals, and build your business plan for your vision of the farm. Advisors want to see your farm family succeed but they cannot “do the pushups for you,” as Stu McLaren, my mentor for our membership site, has said.

Doing the work of having emotionally laden conversations about buying land and equipment can be hard, but you can do hard things with facilitation, using experienced coaches who know how to keep the conversations safe and respectful, to create solutions that are win/win for each generation.

As we mention above, family dynamics play a role in the agreed-upon discounted prices. Make sure you keep financial transparency with both your farm heirs and your non-farm heirs. When folks understand why certain decisions are made, they are more likely to come to peace with the outcomes.

Your discussions about fair family price and expectations about not using fair market value will set the tone of relationships for harmony in your family and business. You get to choose to be cowardly and not do the work on appraisal, asset lists and debt servicing expectations — or you get to embrace the tools mentioned and have peaceful sleep at night.

ALSO: Roster changes

Elaine writes: Many folks on our weekly group coaching calls appreciate Glenn’s years of wisdom from all the farm scenarios he has seen in over 30 years of advising farm families. Glenn is going to be missed when he retires from our coaching team in January, so we have welcomed Alyssa Brown, CPA, from Olds, Alta., who will continue to take on coaching queries related to farm accounting and transition in our breakout rooms on Zoom.

If you would like to be part of our group coaching three times a month, sign up at www.elainefroese.com/membership. Learn from our coaches and each other as farmers in transition. Your whole family is welcome to be part of the learning journey.

The post How to talk about ‘fair family price’ for land, other assets appeared first on Grainews.

Farm groups and lawmakers are concerned that land buys by investors and foreign countries are driving up farmland prices and threatening national security.

Booker’s Farmland for Farmers Act, introduced on Thursday, would ban most corporations, pension funds and investment funds from buying or leasing farmland.

“We must protect farmland from becoming an investment strategy for huge corporations,” Booker said in a statement.

Institutional investors – including Nuveen Natural Capital, a subsidiary of TIAA, and UBS Farmland Investors – own $15.9 billion of farmland, according to the National Council of Real Estate Investment Fiduciaries’ Farmland Index.

Several U.S. senators, including Iowa Republican Joni Ernst and Montana Democrat Jon Tester, have introduced bills in recent months to limit foreign ownership of farmland, citing concerns that adversaries might buy U.S. land to gain influence.

The Senate on Tuesday passed an amendment to the National Defense Authorization Act that would boost federal review of foreign farmland purchases and limit some by China, Russia, Iran and North Korea.

China holds less than 1% of U.S. foreign-owned farmland, according to the Department of Agriculture (USDA). Canada holds 31%.

Jordan Treakle, national program coordinator for the National Family Farm Coalition, said corporate ownership is the more pressing concern for rural communities because of its impact on land prices.

“Most farmers cannot outbid a multinational corporation,” he said.

The average price of an acre of farmland was $3,800 in 2022, a record high and up 75% from 2008, according to USDA data.

Booker hopes to pin his bill to this year’s farm bill, an omnibus package passed every five years that funds farm and nutrition programs, said a staffer.

–Reporting for Reuters by Leah Douglas in Washington.

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Lawmakers debated whether to change Section 25 of the constitution to enable authorities to seize land to address racial land inequalities left over from colonialism and white minority rule.

Redressing them has been a flagship promise of the ruling African National Congress (ANC) but little progress has been made on it nearly three decades since the end of apartheid.

“Today we stand to complete the fight against the original sin of land dispossession,” the amendment’s main champion, Justice Minister Roland Lamola, said in a speech in parliament.

He said the state was targeting land only under special conditions such as it having longtime informal occupants, being unused and held purely for speculation, or being abandoned.

But it was rejected by the ANC’s opponents on both sides of the spectrum. The main opposition Democratic Alliance (DA) and right-wing Freedom Front Plus view the plan as an assault on property rights, while the radical Marxist EFF — which also voted against — wants the state to take control of the land.

In all, 204 lawmakers backed the amendment and 145 voted against, with no abstentions.

In the early 20th century, South Africa’s British imperial rulers gave the lion’s share of farmland to whites, mostly to the Afrikaners, descendants of generations of Dutch settlers who make up most white farmers today.

They left just seven per cent for “natives,” meaning Blacks, aboriginal Khoisan and “coloureds” — Afrikaans-speaking South Africans of mixed multiracial heritage.

Then in 1950, the Afrikaner National Party passed a law limiting movements of non-whites, kicking 3.5 million Blacks off their ancestral homelands and putting them in townships.

Twenty seven years of Black majority rule has barely shifted this apartheid geography, despite Nelson Mandela’s pledge after taking power in 1994 to return 30 per cent of land in five years.

“This bill…does nothing to help landless South Africans who have been let down by the ANC’s failing land reform,” the DA’s land committee chairperson Annelie Lotriet said.

Nearly 26 million hectares — three quarters — of privately-owned land is still in the hands of whites, who make up less than a 10th of the population of 58 million, while only four per cent is owned by Blacks who are nearly 80 per cent, government data shows.

The government has tried to persuade whites to sell their land under a ‘willing buyer, willing seller’ policy, but found hardly any willing sellers. A 2016 parliamentary study found the programme had transferred just 5.46 per cent of farmland to Black individuals, trusts and state institutions in two decades.

— Tim Cocks is a Reuters correspondent for southern Africa in Johannesburg.

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