Table of Contents

Executive Summary .................................................................................................i 1.0 Introduction .................................................................................................... 1 1.1 Project Rationale .............................................................................................. 2 1.1.1 The Productivity of Foodlands .......................................................................... 3 1.1.2 The Cost of Foodland Ownership ..................................................................... 3 1.1.3 The Farm Tax Income Threshold ...................................................................... 4 1.1.4 The Existing Farming Community: Context and Considerations ............................. 5 2.0 Public Amenity Benefits and Foodlands Access Programs .......................................... 6 2.1 Natural Asset Value of Foodlands ........................................................................ 6 2.2 Public Amenity Benefits and Land Use Planning ..................................................... 7 2.3 Rationale of Taxpayer Support for Foodlands Access Programs ................................ 7 3.0 Foodlands Access Strategies and Tools ................................................................ 9 3.1 Tool #1: Foodlands Trust ................................................................................. 10 3.2 Tool #2: Public Land Bank ................................................................................ 10 3.3 Tool #3: Land Connection Services .................................................................... 11 3.4 Tool #4: Incubator Farms ................................................................................. 11 3.5 Tool #5: Farm Tax Policies ................................................................................ 12 3.6 Tool #6: Land Ownership Policies ...................................................................... 12 3.7 Tool #7: Regulation of Farm Leases ................................................................... 12 4.0 Governance Models .......................................................................................... 13 4.1 Local Government-Led Model ........................................................................... 13 4.2 NGO-Led Model .............................................................................................. 14 4.3 Hybrid Model .................................................................................................. 14 4.4 Program Staffing Needs ................................................................................... 14 4.5 Farmer Selection Criteria ................................................................................. 15 4.6 Summary of Governance Recommendations ......................................................... 15 5.0 Community Partnerships and Foodlands Access Programs ....................................... 17 5.1 Indigenous Food Systems ................................................................................. 17 5.2 Education, Research, Celebration ....................................................................... 17 5.3 Summary of Partnership Recommendations .......................................................... 18 6.0 Foodlands Access Program: Estimates of Costs and Revenues ................................. 19 6.1 Variable Cost Estimates ................................................................................... 20 6.2 Fixed Cost Estimates ........................................................................................ 21 6.3 Variable Revenue Estimates .............................................................................. 23 6.4 Net Revenue or Deficit ..................................................................................... 24 6.5 Foodland Access Program Net Costs: 3 Scenarios ................................................. 24 6.6 Summary of Program Budget Recommendations ................................................... 28 7.0 Cost Summary for a Foodlands Access Program .................................................... 28 7.1 Funding Through a Levy ................................................................................... 28 7.2 Accounting for the Status Quo .......................................................................... 28 7.3 Overall Economic Justification .......................................................................... 29 8.0 Program Impact and Timing .............................................................................. 29 8.1 The Approach with the Greatest Impact ............................................................. 29 8.2 Timing of Implementation ................................................................................. 30 9.0 Conclusions .................................................................................................... 30 Appendix ............................................................................................................... i

Table of Tables

Table 1. Summary of Foodlands Access Tools and their Potential Level of Impact................ 9 Table 2. Stability, Lease Terms, Land Use, and Costs Associated with Foodlands Access Models................ 16 Table 3. Potential Roles of Local Government, NGO, Academic, and First Nation Partners................ 18 Table 4. Estimated Variable Infrastructure Costs Range for Foodlands Access Program Establishment on a Hypothetical 80-Acre Site................. 20 Table 5. Estimated Fixed Equipment Costs and Potential Equipment Rental Income................ 21 Table 6. Fixed Costs for the Foodlands Trust Establishment (Year 1) and Ongoing/Annual (Years 2 onward)..... 22 Table 7. Estimated Returns Based on Lease Rates for Different Parcel Sizes (in acres) and Agricultural Activities..... 23 Table 8. Variable Revenue Estimates for a Foodlands Trust................ 24 Table 9. Summary of Revenues and Expenses for Scenario 1: Five acres of vegetable production in good soil..... 25 Table 10. Summary of Revenues and Expenses for Scenario 2: Twenty acres of hay production in moderate soil..... 26 Table 11. Summary of Revenues and Expenses for Scenario 3: Eighty acres of mixed production in good soil..... 26 Table 12. Summary of Program Net Deficit Over 5 Years for Three Agricultural Scenarios................ 27 Table 13. Ranking of Foodlands Access Tools, Jurisdiction, and Overall Level of Impact................ 30

Acknowledgements

This report was developed by Upland Agricultural Consulting in partnership with Farm|Food|Drink.

Invaluable input was provided by Capital Regional District staff and the Regional Food and Agriculture Strategy Task Force.

Feedback on an earlier draft was provided by K. Nixon, Foodlands Cooperative of BC.

Editing services provided by Interwoven Editing. Photos from Unsplash.com

A number of stakeholders and experts were consulted throughout the course of this project, and we sincerely thank them for the time and resources that they were able to contribute. They are referenced throughout the report in the footnotes and a complete listing of stakeholders can be found in the Appendices.

Acronyms

ALC: Agricultural Land Commission ALR: Agricultural Land Reserve BC: British Columbia BCA: BC Assessment CAC: Community Amenity Contribution COCS: Cost of Community Services CRA: Canada Revenue Agency CRD: Capital Regional District CRFAIR: Capital Region Food and Agriculture Initiatives Roundtable FTE: Full-time equivalent GCL: Garden City Lands KPU: Kwantlen Polytechnic University NGO: Non-governmental organization PAC: Program Advisory Committee RFAS: Regional Food and Agriculture Strategy TLC: The Land Conservancy UBC: University of British Columbia

Conversion Units

1 acre = 0.40 hectares 1 hectare = 2.47 acres *While both area units are used in this report, acres are used primarily within the discussion of lease rates.

Executive Summary

Over the last 10 years, four municipalities and many community stakeholders have supported an increase in access to farmland in the Capital Regional District (CRD). The support is due in large part to the high cost of farmland. This report explores the rationale and financial summary for options that would allow local government to increase foodlands access.

Rationale for Foodlands Access

The Agricultural Land Reserve (ALR) totals just over 16,000 ha and represents only 7% of the CRD's area. The region’s population is expected to increase by 27% by 2038, which will put significant pressure on foodlands. Meanwhile, the CRD’s 2018 Regional Growth Strategy includes a target to increase productive foodlands by 5,000 ha by 2038. The ALR has helped stem the loss of farmland, but there is a need for further action to ensure that farmland is used for its intended purpose.

Farmland Productivity

Only 50% of the CRD’s ALR is in production. The underutilization of farmland, both now and in the future, is a lost regional opportunity. With over 50% of the region’s farmers retiring in the next 10 years, there is concern that new farmers will not be able to afford to enter the sector to replace them. ALR landowners who do not farm, but lease their property to other farmers, can obtain the benefits of farm class status with low levels of production. Landowners with less than 25% of their property being farmed demonstrate little interest in making it more productive.

Cost of Foodlands

Vancouver Island has had the greatest increase in farmland value in BC, where it currently sells for up to $100,000 per acre, an increase of nearly 25% over two years. The high cost of land is a barrier not only to new farmers, but also to those wishing to expand their business. This is due in part to agricultural lands being purchased by non-farmers and held with low risk for speculative purposes.

Implications for the Farm Community

Local farmers are not concerned about competition from a regional foodlands access program because:

• The cost of land is rising fast and they were able to buy or lease land for lower prices years ago.
• New farms and farmers are not immediately profitable – it will take years of improvements and experience to become competitive.
• Land trust lease rates would be in line with rates offered on private land.
• Existing farmers would like mentor new farmers.
• There is an unmet demand for local food.
• There is a need for a new generation of farmers in the region to fill leadership roles in farmers' institutes and 4-H clubs.

Foodland Access Tools

There are seven land access tools assessed in this report. They represent opportunities that various levels of government and non-governmental organizations (NGOs) can employ. The seven tools are:

1. Land trusts
2. Land banks
3. Land connecting services
4. Incubator farms
5. Farm tax policies
6. Farmland ownership restrictions
7. Regulation of farm leases

These tools range in their applicability based on:

• Relative Cost: amount of sustained support required.
• Lead Agency: organizational leadership required.
• Timeframe: short (1–3 years), medium (3–5 years), or long term (>5 years).
• Level of Effort: local government capacity.
• Level of Impact: relative amount of land and/or farmers that will benefit.

Table i provides a ranking of each tool, in terms of how useful it is for the CRD.

Table i: Summary of Foodlands Access Tools and their Potential Level of Impact.

*Green indicates good candidate as a tool for local governments; yellow indicates a possible tool to be used within a broader strategy; orange indicates a limited ability for local governments to use the tool.

A Land Trust vs. A Land Bank

The land trust and land bank ranked as the first and second-best tools available for local governments, respectively. While land trusts and land banks are operationally similar, a trust will functionally achieve the objectives for long term land access in a way that a land bank would not. While land banks may work well for other initiatives, such as parks programs, they do not achieve the same outcomes for farmland access programs. This is in part because the Canada Revenue Agency has a specific program for gifting ecologically sensitive land with associated tax credits, but there is no similar program for agricultural lands. A trust model that would protect farmland in perpetuity offers an additional motivation and benefit for land donees over and above minimal tax credits.

It is recommended that the farmland trust program initially target existing lands that are municipally-owned, thus reducing the need to acquire private lands. A trust also allows for a greater sense of security for the farmer, and better achieves the goal of providing long term leases for the purposes of agricultural production. The trust approach therefore provides the best benefits for foodlands access.

Provincial Government Role

A farmland trust was previously undertaken by the provincial government in the 1970s alongside the adoption of the ALR. This program has since ended without a replacement. There are several lessons to be learned from the province’s experiences, and these are taken to heart in this report. One of the most important takeaways was that housing within the land trust caused problems whenever a trust property was transferred from one lessee to another. For this reason, it is not recommended that a regional foodlands trust include a residential component. Farmers will be expected to reside elsewhere. A regional foodlands trust would therefore not meet the needs of all farmers. However, along with other existing programs, such as land connecting services, it will remain an important piece of the overall land access solution. Other experiences from the provincial initiative indicate that a Program Advisory Committee (PAC) should be established to oversee decision-making, including a transparent process to determine farmer membership.

Local Government and NGO Roles

Regional problems require innovative regional solutions. It is recommended that a partnership be struck between the CRD and one or several NGOs (e.g. Farmlands Trust (Greater Victoria) Society, Sooke Region Farmland Trust Society, and/or the Foodlands Cooperative of BC) for the effective delivery of the foodlands trust. By partnering with an NGO (hybrid model), greater opportunities for program grant funding will be possible. However, a base of financial support is required from the CRD, otherwise the trust would be placed in a vulnerable position over the long run. A hybrid model would ensure that the CRD’s role in the trust remains limited to policy development, property and lease management, and overall administration (e.g., overseeing the legal aspects of the land trust, coordinating land use agreements with municipalities for publically-owned parcels, and providing a meeting space for the PAC). The NGO would take control of the operational needs (e.g., employing a full time Program Manager and a part time Farm Caretaker, and oversee the administration of the PAC).

Community Partnerships

A foodlands trust provides an opportunity to work with First Nations to restore traditional food practices and integrate Indigenous food production values into the program. Academic partnerships are also key. Education and research goals can be built into the program. Potential academic partners include the University of Victoria, Royal Roads University, and Camosun College.

Program Costs and Revenues

There are two types of revenues and costs associated with a foodlands trust program: variable and fixed. It is important to note that the cost of land is not included in these calculations. This is because it is anticipated that existing public lands capable of sustaining agriculture would form the basis of a farmland trust.

Variable Costs: Basic infrastructure includes fencing, irrigation, and drainage. The costs associated with a typical site would range from $1,950 per acre to $6,450 per acre (with an average of approximately $3,000 per acre) for the first year of site preparation, depending the level of existing services.

Variable Revenue Sources:

• Lease rates will be in line with those currently paid by farmers in the region. They will range from $100/acre/year to $800/acre/year, depending on soil quality and type of agricultural activities.
• Grant applications are expected to be most successful at the start of the initiative and will help cover the establishment costs. These are expected to bring in approximately $40,000/year.
• Donations are most likely to be used for equipment or public land.
• Corporate sponsorships could be provided for equipment, or for specific programming.
• Depending on the zoning of the land in question, hosting events on site may be a revenue source.
• In-kind contributions could be provided by hosting a website, advertising, supplying meeting-room space, etc.

Fixed Costs: These include operational needs, such as staff time, insurance, marketing, equipment, etc. Establishment costs (Year 1):

• Staff salaries and legal fees: $70,000
• Equipment (purchase): $40,000
• Marketing and promotion: $5,000
• Insurance: $4,000
• Total establishment costs: $119,000

Ongoing (Year 2 and beyond):

• Staff salaries: $170,000
• Equipment (maintenance): $10,000
• Marketing and promotion: $6,000
• Insurance: $4,000
• Total ongoing costs: $190,000

Revenues and Costs: 3 Scenarios

Three scenarios illustrate how site selection impacts the budget:

1. 5 acres of vegetable production
2. 20 acres of hay production
3. 80 acres of mixed production

Table ii. Estimated net income (deficit): 5 acres of vegetable.

Table iii. Estimated net income (deficit): 20 acres of hay.

Table iv. Estimated net income (deficit): 80 acres mixed use.

Overall Financial Summary

The value of natural assets on agricultural land in the CRD is estimated at over $11 million per year. Farmland is also a net contributor to the tax base. A foodlands trust will require sustained financial support over the long term.

The application of a household levy for funding of $127,500/year would require:

• $0.70 per household/year for all areas of the CRD
• $0.76 per household/year for all areas of the CRD except the Southern Gulf Islands and Salt Spring Island; or
• $1.91 per household/year for North Saanich, Central Saanich, Sidney, and Saanich.

Staff Recommendations

Recommendations include:

• Target existing public lands to be used for the trust, in order to minimize the need for land acquisition.
• Have the CRD take on a lead role with support for operational tasks and fundraising by NGOs.
• Establish a Program Advisory Committee and hire a Program Manager and Farm Caretaker.
• Work with First Nations, academic agencies, and other stakeholders to ensure partnership benefits.
• Explore the possibility of funding the program through a household levy.

1.0 Introduction

The goal of this feasibility study is to provide the Capital Regional District (CRD) with a comparative analysis of foodland access tools and recommend a strategy to improve land access for agricultural production. This report compares a foodlands trust, a public land bank, and other initiatives such as land connecting services, incubator farming, and agricultural policy options as potential “tools” in the “toolbox” of a foodlands access program.

The Capital Regional District Board’s strategic priorities include the following actions:

• 4d. Develop a regional agricultural land banking solution.
• 4e. Establish additional incentives and new policies to promote and encourage farming in the region.
• 6c. Investigate ways to best support First Nations economic development activities in cooperation with local government partners.

Definition: Foodlands

The Foodlands Cooperative of BC and CRFAIR note that dialogue with the Working Group on Indigenous Food Sovereignty, lead to changing "farmland" to "foodlands", which recognizes the diversity of food growing and harvesting systems, colonial history of agricultural land policies, and further opens a dialogue between and across communities and initiatives around land access and Indigenous land rights.

Throughout this report "foodlands" include land designated as farmland within the ALR as well as lands that are potentially productive outside the ALR.

1.1 Project Rationale

Within the CRD, farmland is scarce, representing only 7% of the total land base. Furthermore, over 1,400 ha of the CRD’s Agricultural Land Reserve (ALR) has been lost to development since the 1970s. The CRD’s population is expected to increase by 27% by 2038. The CRD’s 2018 Regional Growth Strategy includes a target to increase the amount of land in food production by 5,000 ha by 2038.

Support for a Land Bank or Land Trust

The following municipalities have referred letters of support to the CRD with a request for the creation of a regional farm and foodlands trust program.

• District of North Saanich;
• District of Central Saanich;
• District of Saanich; and
• Town of Sidney.

The District of North Saanich also indicated support for an accompanying farmland acquisition fund.

1.1.1 The Productivity of Foodlands

There were 1,003 farms reporting through the 2016 Census of Agriculture in the CRD, with average gross farm receipts of approximately $64,000. At a total of 16,396 ha, the ALR represents only 7% of the CRD’s total jurisdictional area, however, not all of that land is used for agricultural production. Only 50% of the province’s ALR is in production, a figure that mirrors the level of production of farmland in the CRD.

1.1.2 The Cost of Foodland Ownership

The market value of farmland is no longer solely based on its intended agricultural use. Vancouver Island’s farmland market is influenced by the growing market of farmland in Greater Vancouver. This resulted in the province’s largest regional average increase in farmland value of 23.6% in one year (from 2016 to 2017). Farmland in the region currently sells for up to $100,000 an acre.

1.1.3 The Farm Tax Income Threshold

Farm tax income levels refer to the amount of farm-based income that must be generated to acquire lower agricultural property taxation rates. Income thresholds are prescribed as: a) Minimum of $10,000, if the total area of land is less than 0.8 ha (2 acres). b) Minimum of $2,500, if the property is between 0.8 ha (2 acres) and 4 ha (10 acres). c) Minimum of $2,500 plus 5% of the farmland value of the land for farm purposes in excess of 4 ha (10 acres).

1.1.4 The Existing Farming Community: Context and Considerations

Consultation with CRD farmer stakeholders indicates that a foodlands access program is not a concern for existing operators due to:

• Rising Cost of Land: Most established farmers bought land when it was much more affordable.
• Competitive Lease Rates: Lease rates through the program would be comparable to current market rates ($500/acre/year to $800/acre/year).
• Lack of Mentorship Opportunities: Incubator farms and hands-on training are required.
• Good Farmers Take Time to Grow: New entrants will take time to build skills and will not be in direct competition.

2.0 Public Amenity Benefits and Foodlands Access Programs

The Intrinsic Value of Foodlands

Intrinsic value is calculated such that the enjoyment or benefit to one person is not reduced by another person also enjoying that benefit. An example would be enjoying a view of agricultural landscapes, or benefiting from a reduction of flooding in urbanized areas due to the mitigation of farmland.

The Public Amenity Value of Foodlands in the CRD

The public amenity value has been calculated at $58,000 per acre ($143,000 per hectare) for farmland in Metro Vancouver. The public value in perpetuity was calculated at over $1 Million per acre.

2.1 Natural Asset Value of Foodlands

The Natural Asset Value of Foodlands in the CRD

Studies indicate the value of ecosystem services of farmland at approximately $698 per hectare. If applied to the more than 16,000 hectares of farmland in the region, this would amount to over $11.4 million per year.

2.3.1 Costs of Community Services

A 2004 COCS study conducted in Red Deer County, Alberta, found that for every dollar that agricultural lands provide in revenue, they demand only $0.70 in services. Residential lands required $1.81 in services for every $1.00 paid in taxes.

Example: Sharing Benefits of Foodlands Access: Garden City Lands, Richmond, BC

The Garden City Lands (GCL) are owned by the City of Richmond and are approximately 136.5 acres (55.2 hectares) located entirely within the ALR. Farming is being established on the site in partnership with Kwantlen Polytechnic University (KPU) through a program that applies sustainable practices and education into the overall food production goals.

3.0 Foodlands Access Strategies and Tools

Table 1. Summary of Foodlands Access Tools and their Potential Level of Impact

3.1 Tool #1: Foodlands Trust

Definition: Land Trust

A land trust is a legal term that describes an agreement whereby one party (the trustee) agrees to hold ownership of a piece of property for the benefit of another party (the beneficiary), usually for a specific use. A foodlands trust facilitates foodlands protection while promoting environmentally sensitive farm practices, supporting new farmers in accessing land, and securing long-term farm use.

3.2 Tool #2: Public Land Bank

Definition: Land Bank

Land banking refers to the process of the public acquisition of underdeveloped or underutilized land for future development purposes. A public land bank with a focus on foodlands would acquire underutilized farmland and promote productive agricultural use by leasing it back to farmers.

3.4 Tool #4: Incubator Farms

An incubator farm is a land-based multi-grower project that provides training and technical assistance to aspiring farmers.

4.0 Governance Models

Three possible governance approaches:

• Approach 1: Local government–led model: Land trust managed and operated by the CRD.
• Approach 2: NGO-led model: Land trust managed by NGOs with minor support from CRD.
• Approach 3: Hybrid model: Land trust managed by the CRD with significant involvement and support from NGO partner(s).

4.6 Summary of Governance Recommendations

The following recommendations are provided for governance of the farmland trust program:

• A foodlands trust is model recommended in part because it is the least likely model to be subject to political influence over time.
• The government & NGO hybrid model represents a “best of both worlds” land trust approach. This could include a partnership between the CRD and one or several NGOs.
• The program should be staffed with a full time Program Manager and a part time Farm Caretaker.
• A Program Advisory Committee (PAC) should be established to oversee the functioning and decision-making of the land use access program.

Table 2. Stability, Lease Terms, Land Use, and Costs Associated with Foodlands Access Models

5.0 Community Partnerships

5.3 Summary of Partnership Recommendations

The following recommendations regarding community partnerships are provided:

• Foodlands access program partners should meet in person at least twice a year.
• The program must recognize and reflect the opportunity to work with interested First Nations in restoring traditional food practices, as well as integrating Indigenous food production into local food farming practices.

Table 3. Potential Roles of Local Government, NGO, Academic, and First Nation Partners

6.0 Foodlands Access Program: Estimates of Costs and Revenues

Productive Foodlands Create Jobs

Researchers from Kwantlen Polytechnic University determined that if 113 ha (279 acres) of underutilized farmland in Surrey were brought into production, it would have the potential to contribute $8–16 million in gross receipts and employ 100–136 full-time employees.

6.1 Variable Cost Estimates

Table 4. Estimated Variable Infrastructure Costs Range for Foodlands Access Program Establishment on a Hypothetical 80-Acre Site.

6.2 Fixed Cost Estimates

Table 5. Estimated Fixed Equipment Costs and Potential Equipment Rental Income

Table 6. Fixed Costs for the Foodlands Trust Establishment (Year 1) and Ongoing/Annual (Years 2 onward).

6.3 Variable Revenue Estimates

Table 7. Estimated Returns Based on Lease Rates for Different Parcel Sizes (in acres) and Agricultural Activities

Table 8. Variable Revenue Estimates for a Foodlands Trust.

6.5 Foodland Access Program Net Costs: 3 Scenarios

Table 9. Summary of Revenues and Expenses for Scenario 1: Five acres of vegetable production in good soil.

Table 10. Summary of Revenues and Expenses for Scenario 2: Twenty acres of hay production in moderate soil.

Table 11. Summary of Revenues and Expenses for Scenario 3: Eighty acres of mixed production in good soil.

Table 12. Summary of Program Net Deficit Over 5 Years for Three Agricultural Scenarios

6.6 Summary of Program Budget Recommendations

To summarize, the following 7 recommendations regarding the program budget are suggested:

1. Basic equipment and storage should be purchased by the host organization and rented out to foodlands access farmers on a cost-recovery basis.
2. A more detailed parcel-based infrastructure cost analysis should be completed once specific parcel(s) have been identified.
3. Local case studies identify the costs incurred to maintain public lands “as-is” currently range from $360 to $3,400 per acre per year. These figures should be kept in mind when considering investment levels.
4. Resources should be spent on promoting the program itself, and the need for land donations.
5. Lease rates must be aligned with those being currently paid by farmers in the region on private land.
6. Local government should partner with an NGO to apply for grant funding.
7. A secure source of long-term funding in the range of $127,500 to $143,500 per year will be required in order to cover annual deficits and provide program stability.

8.0 Program Impact and Timing

Table 13. Ranking of Foodlands Access Tools, Jurisdiction, and Overall Level of Impact

9.0 Conclusions

Key recommendations include:

• Establish the program as a land trust led by local government and supported by NGOs.
• Target existing public lands to be used for program, in order to minimize the need for land acquisition in the short term.
• Establish a program advisory committee to oversee the program.
• Work with First Nations, academic institutes, and other community partners to ensure that the program effectively establishes partnership goals.
• Hire a program manager and a farm caretaker.
• Acquire some basic farm equipment that could be rented out to farmer members on a cost-recovery basis.
• Explore the possibility of funding the program through a household levy or fee for service.

Appendix

See separate document.