Ownership Restrictions and Farmland Values: Evidence from the 2003 Saskatchewan Farm Security Act Amendment

An underlying issue in discussions of farmland ownership restrictions is their impact on farmland values and on land acquisition costs for local farmers. In this article, I examine the farmland value consequences of relaxing a particularly stringent farmland ownership restriction in the Canadian province of Saskatchewan. The Saskatchewan Farm Security Act was introduced in 1974 and prohibited non-Saskatchewan residents and corporations from owning Saskatchewan farmland. In 2003, the act was amended to allow Canadian residents and Canadian corporations to acquire farmland, bringing Saskatchewan in line with neighboring provinces and states that restrict foreign ownership but are open to domestic ownership. I estimate the impact of the 2003 amendment on Saskatchewan farmland values using 1995 through 2010 parcel-level farmland transactions in Saskatchewan and its neighboring province of Manitoba. The impact of the 2003 amendment is assessed in a series of econometric models that use differential trends in farmland prices in the two provinces before and after the amendment. I find that the 2003 amendment led to a 1.9% to 3.1% per year increase in Saskatchewan farmland values.