Western Grain Transportation Reform and Agricultural Land Values

Executive Summary

If government funded farm programs are structured in such a way that they provide a reasonable perception of permanence, then direct income transfers through these programs will have a significant affect on farm asset values over time. The Western Grain Transportation Act subsidy was perceived to be a right for Western Canadian farmers that would last into perpetuity. Several comparisons regarding land values are made between the Prairies and several other regions to evaluate the impact that may have resulted from the end of the WGTA.

The reports concludes that while determinants of land values, are moving values in the same direction in the prairie region, the rest of Canada as well as the Northern Plaines of the US, the strength of these determinants to increase farmland values in the Prairie Region is lagging. This lagging land value within the Prairie region may be in part due to the drought that occurred within the past few years, in conjunction with record low wheat and barley prices, and an economy that is only recently adjusting away from these commodities. The highly subsidized agriculture sector in the US has likely contributed to the gap within the Canadian Prairie region land values and the US Northern Plaines.

To receive a hard copy of this report or for additional information, please contact:

Denis Tully (tullyd@agr.gc.ca), Chief, Policy Analysis
500-303 Main Street; Winnipeg, Manitoba; Canada R3C 3G7
Telephone: (204) 983-0569; Fax: (204) 983-5300