Fraser Valley (Courtesy BC Business) – A significant amount of farmland in the Lower Mainland is currently sitting fallow, while owners benefit from the low tax rates of agricultural land.

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That’s the conclusion of a consultant’s report presented to Metro Vancouver’s planning and agriculture committee on Friday. “The issue of concern is that individuals are purchasing land in the ALR (Agricultural Land Reserve) with no intention of farming it,” stated the report, prepared by Upland Consulting.

Other agricultural landowners are farming as little as possible in order to qualify for farm class property taxes, because farm property is taxed at a fraction of the rate of residential property. On a 10-acre property with $150,000 in building improvements, a property owner in Richmond would pay $1,025 with a farm class designation and $10,511 without it.

“While some of these property owners are leasing their land to farmers,” stated the report, “that approach is primarily motivated by the ability to receive… the significant associated tax benefits.” These short-term leases typically do not help to build the agricultural industry.

Speculation is also contributing to a shrinking supply of farmland, with buyers holding land in hopes that it will be removed from the ALR so they can develop it for other purposes.

An owner in B.C. only has to produce $2,500 in farm income to be classed as a farm, an income threshold that is one of the lowest in Canada and abroad. The report recommends that the region raise the minimum income level to $3,700, as part of an effort to encourage farming on agricultural land. Metro Vancouver will be using the report to make recommendations on tax policy to the province.

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