The Agricultural Land Trust evaluates farmland by comparing acquisition costs to the quantum of potential rental income. Saskatchewan land, in particular, has appreciated significantly in the past decade, and is predicted to continue gaining value for years to come. According to Statistics Canada, Canadian farmland has appreciated 8.15% per year between 2008 and 2018, while land in Saskatchewan has appreciated 12.12% during that same period. In spite of growth, land in Saskatchewan remains some of the most affordable, having soil quality similar to that of the other prairie provinces.
The Agricultural Land Trust leases acquired land to local farm operators for cash rent. There is a natural alignment between the Trust and farmers: we work with farmers to identify land improvement and reclamation projects, which not only increases farmable acres but also improves farming efficiencies and ensures the land continues to be productive for future generations. These efforts generate value over time for both the farmers and the Trust, especially as the demand for agricultural products grows.
Investment in Canada’s farmland is a capital appreciation strategy. What makes us stand out from the competitors in our industry is the use of leverage. This results in the investor being exposed to the appreciation of more acres for an invested dollar than in a non-leveraged structure.