I am a proud Farmers Union Member.We are up against Barons who want to exploit the land. When you support a small farmer, you are resisting the barons.
The Current in Saskatoon, the ‘Paris of the Prairies’ – Part 3
Guests: Robert Andjelic, Julie Maxwell, Terry Boehm
MG: Hello, I'm Matt Galloway. This is a special edition of The Current from Saskatoon. You do not have to go very far from this city to find yourself in farming country. This province is often called Canada's breadbasket. But like elsewhere, farming here in Saskatchewan is going through a transition. Small farms are becoming rare. Family farms are expanding into large operations, and big investors see an opportunity in all of that. And that is where our next guest comes in. Robert Andjelic is the largest farmland owner in Canada. He started investing 14 years ago. Most of his land is in Saskatchewan. He's in our Calgary studio this morning. Robert, good morning.
ROBERT ANDJELIC: Good morning, Matt.
MG: How did you come to start investing in farmland?
ROBERT ANDJELIC: Well, originally, most of my life, I was in commercial real estate and construction. And I seen the subprime issue ready to hit the fan in [2006], [2007] and [2007], we sold the portfolio at the peak. It was around 3,000,000 square feet of commercial space. And then I thought to myself, "Well, what does Canada have that the rest of the world needs and China or other countries can duplicate easily?" And the answer to that was farmland and agriculture and water.
MG: Did you know much about agriculture, about farming when you got into this?
ROBERT ANDJELIC: Well, I was always going to hobby farming a little bit, but never really actual farming where I had to make a living out of it and pay the bills from it.
MG: You're not harping on farming now. You have, what? Upwards of 250,000 acres of land in Saskatchewan?
ROBERT ANDJELIC: It's almost, it's getting up there, yes. To the, almost that to that, that 250.
MG: Why is farmland in Saskatchewan such a good investment for you?
ROBERT ANDJELIC: Well, before I got into farmland, I looked at all the provinces. Of course, what they had to offer, what I read across Canada. Actually, I studied throughout the world, global. And at that point, Saskatchewan had some of the cheapest farmland in the world on an equal production basis. So, if you were producing 50 bushels an acre, let's say canola in U.S., 50 bushels in Saskatchewan, in Alberta, or in Manitoba, land should be a similar price, save for some differences in freight and so on. But Saskatchewan at that time was about less than half the price of Manitoba and about one third of Alberta farmland. That was, of course, due to the regulations they had where you had to be a Saskatchewan resident to own Saskatchewan farmland. And then, they changed it that you had to be a Canadian citizen.
MG: And that gave you an opportunity to, to get in.
ROBERT ANDJELIC: Well, I got in and I kind of figured that the rest of the market would figure out that it was a good deal. And so, I started buying real fast and accumulating. At that time, they had a lot of listings. I'd say 4 or 5 times more than they have currently.
MG: What sort of response did you get from people when you started buying up all this land?
ROBERT ANDJELIC: Well, they thought I was crazy because they had all these memories of the '80s when their prices collapsed and everything else. And when I started buying, price of land was only $400 or $500 or $600 an acre. When I started paying $650, they thought it was way too much. But I knew it had to, or I didn't know. But I figured it would have to come up.
MG: You have about, well, just more than 200 farmers who rent from you and you spend a lot of time driving around the province, visiting the farmers on your land. Tell me a little bit about why that's important for you to be out with them, to see what they're doing and to see what life is like on the land that you owned that they're renting from.
ROBERT ANDJELIC: Well, that's very important because we talk about rotations of crops and about how to do land improvements, because most of the land, especially the eastern part of the province, doesn't lend itself very well to today's modern big equipment. So, it needs some improvements, the removal of fences. Quite often, there's rock piles everywhere that people left throughout the years of farming and we bury those so there's at least less obstacles because you can't manoeuvre a 90-foot cedar the way you could an old 10x12 footer. So, today's cedars are 90 feet and then, you have that big 500 horsepower tractor up front with the cedar and the nurse wagon. So, it's like a little train coming along. We try to manoeuvre in between all that.
MG: You've admitted that, that you've turned farming in some ways on its head through those kind of practices.
ROBERT ANDJELIC: Well, not really, but we are doing what we can so that my upper juicers have the most efficient land as far as farming practices are concerned in Canada.
MG: That, that's been controversial. There have been a lot of people who have said that land transformation has, for example, drained wetlands. It's killed the biodiversity around these farms. It's essentially just flattened them out so that you can have an industrial scale farm.
ROBERT ANDJELIC: That's not really true.
MG: What, what do you say to that?
ROBERT ANDJELIC: What I'll say to that is you have a full section. Let's say one mile by one mile square. Around that section is all the road allowances and they are all either trees or brush or something. The rest, you farm in between. So, you can never remove all that. So, you do not have just everything bare. That's not, absolutely not true. And then, there's no way that we can farm everything anyway. Ottawa total 245,000 acres or thereabouts. We have 40,000 acres of green space that we can farm that's will be in, that's creeks, that's slews, that's all kinds of different obstacles that you just can't farm through. And those stay like that.
MG: Do you think that the large operations, like the ones that that you're talking about and the ones that you helped create, I mean, is that kind of the future of farming in Saskatchewan, do you think?
ROBERT ANDJELIC: Well, all you have to do is look at it is look at the past. Look at the past hundred years. It's all been going, where you used to have a house virtually on every quarter section. Now they're, of course, much further apart and the farms are getting bigger. I think the average size of a Saskatchewan farm is around 1,600 acres. But you have to gear your land base to your equipment. So, how do you have the latest equipment, the most efficient equipment, and do only 2000 or 5000 acres? You have to have it go through to that next size.
MG: So, do you think that smaller farms can make it in Saskatchewan?
ROBERT ANDJELIC: Well, they can if they use proper farming business practices. Yes, there's room for everybody.
MG: One of the things we hear and we've heard it from the National Farmers Union, you'll hear it from people who want to get into farming, is that they'll blame investors like you for, for pricing young farmers out of the market. They say that it's impossible for them to, to get in or even to survive because you push up the prices of farmland and it's hard for them, to your point. I mean, they need to scale up, but they can't afford to scale up because the land's more expensive. When you hear that, when you hear investors like yourself called land grabber by, by some people, how do you react?
ROBERT ANDJELIC: That's totally false. That whole idea that we push up prices or that we even compete. Most of the sales that come to me are much larger, quite often 2,000 up to what, seven, eight, 10,000 acres? No, no young farmer's going to buy that anyway. And quite often, when they're smaller pieces that are for sale, I step aside. I don't even bother with them. I let the producers, local producers pick them up.
MG: So, you don't believe that investors, just to be clear, you don't believe that investors, by investing in farmland, drive up the price of that land?
ROBERT ANDJELIC: Absolutely not. If you look at investors constitute around 3 per cent of the total land ownership in, let's say, Saskatchewan. How does 3 per cent sway any market? I've been in commodities, I've been in stocks. I've been all kinds. Three per cent doesn't do anything to any market.
MG: When you are out with your farmers on the land that you own, the land that they're renting from you, do you see the impact? I mean, we're in a changing climate and they would be as close to the land as anybody. Do you see the impact of climate change in the work that you do?
ROBERT ANDJELIC: Absolutely. It's happening. No question. I see that when I talk to my producers, let's say south of number 1 Highway where they used to get 25, 30, 35, even 40 bushel canola crop, let's say, like canola is a cooler weather-loving plant. So, when you get all this heat coming like we've had in the past summers and so on, it doesn't produce as well.
MG: What does that mean for the future of farming in Saskatchewan?
ROBERT ANDJELIC: Well, all you have to do is you have to move up higher up north and we are ready in front of it. We're trying to buy land further north, getting ready for the future.
MG: What do you do with the forests that are out there?
ROBERT ANDJELIC: Well, there's only one thing to do. You're going to have to clear them now. If you don't clear them, you're going to have total reduction in production.
MG: So, you have to clear out those forests to be able to farm further north because you can't keep farming what you are farming further south.
ROBERT ANDJELIC: If you want to farm up there. But so far, we're not in the forests. We're only. There used to be grazing and so on. So, you just break that land and turn it into cropland. So far, we're not clearing forests. But in the future, you will have to clear the forests if you're going to take advantage of that. Canada and Russia are two countries in the world that may benefit from climate change. You're going to be able to grow crops for the north and you have the soils that you can grow crops in. If you look at Ontario, for example, yes, it'll they'll get more heat units further north. But what do you have? You have the Canadian shield. If you look at Manitoba, Manitoba's mostly coniferous up there and the soil is too acidic. But once you get into Saskatchewan, then it becomes more favourable towards opening up and the governments are going to have to look at that and say, do we want to cut back our total production of crops? Because you're not going to be able to grow them south and you may grow other crops. But if you get milder winters, other insects and diseases will come in with that that you never really encountered before.
MG: And to you, I mean, this is necessary to think about this. Just finally, on that, it's necessary to think about this because otherwise, well, the amount of food that we produce in this country will change.
ROBERT ANDJELIC: Absolutely. And, we are reduction if you don't allow forest clearing and so on, the governments and the people are the ones that'll have to decide that. But because the crop production will diminish and that'll happen throughout the world.
MG: Do you see opportunities for a younger generation to get into farming?
ROBERT ANDJELIC: Absolutely. If they want in, there's a way in. You build it slowly. But don't forget that land is not the only issue. What about every piece of equipment, modern equipment that's $1 million-plus?
MG: Well, and that's the thing. I mean, just given the amount of debt that farmers carry right now, you honestly believe that young farmers, people who are I mean, we talk about a housing crisis and this is on an industrial scale that those young farmers, you honestly believe that they would have a shot to get into this?
ROBERT ANDJELIC: Yes, they do. They could. [MG: Yeah], because you don't have to start with brand new equipment a million dollars each. There's a lot of older equipment that maybe doesn't have that technology and so on, but it produces just as well.
MG: Robert, I'm really glad to have the chance to talk to you. Thank you very much for taking time to speak with us.
ROBERT ANDJELIC: Thank you.
MG: Robert Andjelic owns hundreds of thousands of acres in Saskatchewan, as you heard.
MG: Julie Maxwell is the president of the Youth Caucus of the National Farmers Union. A small vegetable farmer herself, Her parents own a farm in Maidstone, Saskatchewan, about two hours northwest of Saskatoon. Terry Boehm is a fourth generation grain farmer in Colonsay, about an hour southeast of Saskatoon. He was also president of the National Farmers' Union about a decade ago, they've been listening in. Good morning to you both.
JULIE MAXWELL: Good morning.
TERRY BOEHM: Good morning.
MG: Terry, what do you make of what we heard from Robert Angelic there about in particular the need for farms to expand?
TERRY BOEHM: Well, I think that on many levels he's correct. There's been significant pressures to force that happening, including very stagnant commodity prices, extremely high input and equipment cost and the amount of control that's being exerted increasingly over seeds, the consolidations in terms of the mass of global power, buying our products and also supplying the inputs. And many of them are one and the same. That certainly drives a tremendous pressure to scale up because margins are very thin. And of course, farm numbers are decreasing drastically in Canada, and yet farm debt is increasing rapidly. Around 200,000 farms in Canada now carry about $1.4 billion of debt. And around the world, we're entering into a demographic crisis of how do you attract people back into agriculture? We're an ageing population, and I'm part of that statistic.
MG: I want to come back to that, and that's that succession issue that a lot of people have talked about. Julie, as I said, you're the president of the Youth Caucus of the National Farmers Union. That union, a year ago, was on Parliament Hill in Ottawa rallying, protesting large land investors. You just heard maybe the largest land investor in this country say that he's not to blame for forcing small farmers out or changing in many ways how farmers can get in. What do you make of what he had to say?
JULIE MAXWELL: I respectfully would disagree with a lot of what he had to say. I think it's pretty clear that land speculation has played a huge role in driving up the price of farmland. And even beyond that, I just wanted to talk about the power dynamics, like whoever controls the land, controls the food system, controls the economy, controls the country, and it's just entering into dangerous territory the more and more that we allow our investors to take over our farmland. So for us, it's a lot about that balance of power that's scaring us as young farmers. But also, yeah, the land speculation is pricing us out of the market.
MG: Who's being priced out, who can't get into the game?
JULIE MAXWELL: I would say anyone that wasn't born on a farm or born into some kind of wealth can't get into the game right now. I talk to young farmers all the time who want to start farms, who dream of farming. Like, I think there is a bit of a misconception that nobody wants to farm anymore, and I always try to say that's not true. There are so many people who dream of farming, but they just don't see how it's possible or how it's viable, or they've tried and it hasn't worked. And a lot of these folks don't want to produce commodities and do the style of farming that you've mostly been talking about. A lot of these folks just want to feed their communities. They want to have small farms where they, you know, grow livestock and vegetables and food for communities. You know, just simple, noble goals aren't feeling possible for most young people.
MG: Terry, tell me about your farm. How long has it been in your family?
TERRY BOEHM: Well, it's, my great grandfather arrived in Saskatchewan around 1903, started with the typical homestead of 160 acres and then slowly built up farms. When I became engaged, I've, I guess I've more than doubled, almost tripled the size of the farm. And I have another business in order to finance the purchase of land that I worked very hard at and slowly built up. So currently, it's a green operation that's just a wee bit shy of 4000 acres.
MG: How difficult is it to stay afloat, if you don't mind me asking?
TERRY BOEHM: For myself, I'm basically in a holding pattern as I'm kind of nearing the end of my farming career. We're subjected to extremely variable grain prices. Currently, we're in a down cycle. Even when we were in a high-price cycle, it wasn't actually that high. Given that my father in the '70s could sell canola or flax for around $12 a bushel. Currently, that's the price right now. And the costs and expenses have increased astronomically. If I was starting out now, it would be a drastically different picture and much, much, much more difficult. But, you know, when you look at currently a bushel, number one wheat, you might get $8, $8.50 a bushel. That'll produce about 90 loaves of bread. A bushel of barley, malting barley's about $5 that will produce about 300 bottles of beer. The price of our commodities are a very insignificant price of the end product.
MG: Julie, given that, and your parents have about 1000 acres of land, could you imagine taking over the farm, you or your siblings, as part of your future?
JULIE MAXWELL: I have tried to imagine it. I've thought about it quite a bit. [MG: And?] My siblings are city kids, so really it's up to me. But we're all very attached to the farm that we grew up in. We all want to be able to maintain a connection to that land. And for us, honestly, you know, we're the lucky ones or I'm one of the lucky ones that has access to land when so many aspiring farmers don't. But what I don't really have is community. And when farms scale up and up and up and rural populations decline, you know, our rural communities erode. And I'm really lonely out there on my parent's land. So for me, that's really been one of the biggest challenges, is just feeling a sense of community, having access to markets, because I'm a direct market farmer and I guess you asked me if I would be willing to take over the grain farm. And really, my heart is in vegetables. [MG: Yeah.] I've thought about grain and yeah, for me, vegetables is much preferred, but I don't know if it's possible out in that, out in that community. And, you know, I don't, I don't really have any friends out there. I just talk to my dog all day.
MG: I'm sure the dog is happy for your companionship. But I know what you mean. I mean, like the community that you might have wanted to lean into, isn't there?
JULIE MAXWELL: Exactly. [MG: Yeah.]
MG: Terry, you said you're coming toward the end of your farming career. What happens to the farm when you retire?
TERRY BOEHM: Well, that's something that I'm grappling with. I'm at, and I'll rent the land for a period of time. I, I think that, that question is really difficult for me because there are current practices that I think are probably folly in the long term that allow the scale up of farms to operate, including the spraying of crops just before harvest. That's become a relatively common practice. This is something I really steer away from reliance on, on large scale chemical applications. Also, I do use herbicides, but on a much reduced level. So, the possibility of sort of finding somebody with my own mindset is probably fairly unlikely.
MG: But this is a big deal, though, right? There's about 40 per cent of the farm operators that are set to retire over the next decade. We talk about this farm succession crisis. That's a real, it's a real concern.
TERRY BOEHM: Absolutely. Absolutely. And I don't have any real answers, other than you have to ask a basic question: What will it take to attract people into agriculture, and to make it possible for them to thrive, and for communities to build? And there, one has to think about the risks, the financial burdens that one takes on, the isolation and the thin returns. So then, you have to start to ask what kind of food system are we operating in? In Canada, it's, you know, basically the biggest driver is to increase agricultural exports, but there is very little credence given to those that are producing that and what the end outcome is. Even somebody like Mr. Andjelic, you know, he talks about the only 2 per cent of land having very little influence. But if you multiply 2 per cent by 50, you have 100 per cent. You know, it's an unlikely scenario, but if you have 58 owners, and one of the largest cream producing areas in the world, I think we need to ask some really fundamental questions about agriculture.
MG: Julie, to your point, I mean, the myth that young people, this narrative that young people don't want to get into farming, you said is nonsense. You hold this retreat for young farmers across the country last week, and you talked about how people want to get in and they want to get in at a scale that allows them to feed their community. What has to be done to, to make that happen?
JULIE MAXWELL: Yeah, all of these young people just need a little bit of support. And I think Terry, you know, he got into it when he talked about how our government really only supports large-scale farming and like commodities. Like I've heard it said, we don't really have an agriculture policy. We have an egg export policy. And I really feel that as a, as a small-scale farmer, I don't feel very supported by the government. You know, I don't have access to crop insurance programs or extension services that I know of. So, I think a good start would be more support for small-scale direct marketing farmers. There's a million things that the government could do, but that's, that's a couple of them.
MG: Are you optimistic that they'll do any of them, any of the million? Because it's a negative, it feels like an existential thing. This is about how we feed ourselves.
JULIE MAXWELL: Yeah. And I don't want to end the interview on a, on a downer, but I don't know if I am that optimistic. Just the way that the political scene is moving in Canada and in Saskatchewan. There's a lot of support for, you know, big business rather than the people. And what gives me hope is participating in the National Farmers Union, its incredible group of people who are so smart and so engaged and, you know, farmers on the ground to build policy together and come up with solutions together. And that gives me hope.
MG: I'm really glad to talk to you both about this. I wish you both the best of luck. This is an important subject to talk about, and I'm glad to have you here. Thank you very much.
JULIE MAXWELL: Thank you for having me.
TERRY BOEHM: Thank you.
MG: Julie Maxwell is the president of the Youth Caucus of the National Farmers Union, small vegetable farmer herself. Terry Boehm is a grain farmer in Colonsay, Saskatchewan. And that is The Current from Saskatoon for this Tuesday. I'm off to host our live event at the Broadway Theatre in Saskatoon tonight. You will hear that program tomorrow. It's going to be a dandy. We have some great conversations lined up to celebrate this city, but also dig in to some of the wicked challenges that it faces. If you want us to come to your city next, this is a thing.
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