By Kevin Werner, News Staff
Hamilton area farmers are seeing their property worth more, and their crops bring record prices because of last year’s drought. But that has only added to their financial headaches.
Under the province’s reassessment,Ontario, and Hamilton farmers are seeing a five per cent increase to their farmland value, according to the Municipal Property Assessment Corporation (MPAC).
Even though local farmers also suffered through last year during one of the driest summers ever, it was even worse for farmers globally with scorching weather wiping out some country’s commodities, said city finance staff.
Mike Zegarac, acting corporate finance general manager, said MPAC has based its higher assessments on agriculture land for the now lucrative cash crops, such as corn, soybeans, and grains, coupled with a shortage of arable land.
“There is a demand and limited supply,” said Zegarac. “MPAC is taking into consideration the global environmental factors. We have tried to mitigate the tax policies to mitigate the tax shifts.”
Soaring heat last year impacted the corn, grain, and soybean crops in the United States, while droughts in Russia, Ukraine and Australia added to the decline in commodity yields.
There are no additional taxes under a reassessment, said city financial staff. Instead, shifts in taxes occur among the properties. For instance, as agricultural land shoots up 5.4 per cent, commercial properties are negative 1.4 per cent below in assessment, as does industrial land. Also, residential properties see a modest 0.1 per cent in assessment, and multi-residential jumps 2.1 per cent.
The city’s rural councillors weren’t impressed with the explanation. Flamborough councillor Judi Partridge said the assessment “penalizes” farmers for their hard work during difficult times.
Glanbrook councillor Brenda Johnson was equally mystified.
“I don’t understand how (MPAC) can look at the global market,” she said.
The city’s director of taxation, Larry Friday, said MPAC has seen an increase in sales for farmland across the province.
“There seems to be a demand for farmland,” he said.
But Johnson pointed out that demand for farmland is being spurred on by developers looking to build residential units on open agriculture land.
RE/MAX Farming Trends reports for 2011 and 2012 have shown farmland in easternCanadahas become almost as good as gold. Farmland prices per acre in Woodstock/Stratford, and in Bruce and Huron countries, for instance, have almost doubled over the last two years to about $5,000 to $10,000 per acre.Ontario’s land still remains a bargain compared toBritish Columbia’sFraserValleyland, which is $40,000 to $60,000 per acre.
Flamborough councillor Robert Pasuta, who operates a farm, said to make a farm economically viable, owners need to get bigger. People from across the region, he said, have been buying up farmland in the hope of expanding their operations.
“There are less family farms,” he said.
And while corn prices and soybeans are up 40 per cents, the costs of farming have also skyrocketed. Machinery, feed, seeds, and other expenses are soaring, he said, cutting into a farmer’s revenues.
But Pasuta’s largest concern is from overseas with people from China, and other countries eyeing Ontario’s prime agricultural properties.
“We are afraid of foreign countries coming in and buying up our land,” he said.