Why Do We Need A Different Way To Rent Land?

31 January '13

Trends in Canadian agriculture are changing:

  • Farm land values are high, and have increased steadily for the last decade.

  • The average age of farmers continues to rise - 48% of Canadian farmers are now over the age of 55, and have downsizing or retirement on the horizon.

  • Fewer people become career farmers - The number of operators declined 10% over the last 5 years, and now only 8% of farmers are under the age of 35.

  • There are fewer farms - Since 2006 there has been a 10% decrease in total farms.

  • The size (acreage) of farms is increasing - In the last five years, the average farm has increased acreage by 6.9%, and in Saskatchewan farm sizes have increased over 15%!

  • The added acres increasingly come from rented land - Owned farm land has been steadily decreasing for every census since 1976.

  • Internet use, on computers and mobile devices is higher than ever, and expected to increase! Internet use for farm business has increased over 20% in the past five years.

These trends have created a scenario where the status quo of farm rental is no longer meeting the needs of either the farm operators, or the landowners.

So what exactly is the status quo? At the moment, land rental arrangements are done through word-of-mouth, a hodge podge of print classifieds, as well as some online listings. In some cases, when these methods fail, viable agricultural land is unfarmed because of failure to find a lease match. None of these scenarios are optimal for the needs of today's farmers, landowners, or the sustainability of farming. The current trends mean that a better way is necessary. 

Farm operators are faced with the challenge of running larger operations in order to remain competitive. With less turnover in land sales, and high prices, buying land is often too capital intensive. This means growing by renting. The extra acreage also means farming over a larger geographical region, and in doing so, personal word-of-mouth connections are less accessible and effective, making rent matches harder than before. Lack of a centralized listing of land for rent means that time is spent searching through numerous classified ads, both in print and online, taking up valuable time - and any farmer (or farm family) knows that time is of a premium value! After finally finding a listing that would work, farmers often find out they are too late, never getting to make an offer in the first place. In the case of a young farmer trying to start or grow an operation, finding rental land can make or break their ability to do business - at all.

Landowners represent a more diverse mix than ever before. Many aging farmers are downsizing or retiring, but reluctant to sell their land. Increasingly, non-farming children are inheriting or becoming trustees of farm land, choosing to retain ownership, but unsure of the rent they should be asking from a tenant, or how to find a tenant in the first place. Third, investors are purchasing land, but similarly lacking the connections or infrastructure to create solid land rental agreements and relationships. With the status quo methods, landowners don't have the assurance that interested farmers even knew their land was for rent in the first place, and furthermore, are not assured that they have received an offer that reflects the worth of their land. In order to compensate, landowners are left with uncertainty and/or a lengthy, uncomfortable process of back-and-forth negotiations between parties to find the best tenant.

The result? Time, hassle and discomfort, on both parts of the equation. There is a better way!

Given that internet use is on the rise, a web solution seems the obvious answer, BUT, to be effective, it needs to meet the needs of the tech savvy generation of emerging farmers and the less-than-experts-at-technology crowd (not to mention, everything in between). Not to worry. Rentthisland.com has been custom crafted with a full range of modern features to keep farm operators in-the-know about new opportunities, but simple enough, that it takes very little computer experience to make full use of our services, as a landowner or operator. 

RentThisLand.com is the only Canadian website for farmland rent by tender - a highly effective process that lets landowners test and understand the market value of their land before leasing it, and a process that securely and privately gives any interested farmer a shot at renting the land! 

To better understand RentThisLand.com's process, check out our 'How it Works' section. Better yet - contact a member of our team today!