Here’s an interesting fact: the tradition of leasing public lands for grazing dates back over a century, even before the province of Alberta itself was founded.
To this day, a segment of publicly owned land continues to be leased out for grazing, and the terms of those leases are set through a process managed by the Government of Alberta and the stakeholders involved. The rates and fees associated with these leases are determined through a framework that balances the interests of all involved, including those of the lessee, the Crown, and Albertans who depend on our public lands for their livelihoods.
But what’s been happening lately with grazing rent, license, and permit fees, why is there a need for change, and how will this affect you if you’re considering purchasing grazing land for sale in Alberta? We’ll take a closer look at that in this post.
The Need for Modernization in Grazing Rent, License & Permits
In recent years, there’s been a growing chorus of voices calling for a reexamination of the framework that sets rates and fees for grazing on public land in Alberta. These voices come from many different quarters: lessees, the Crown, and even members of the general public.
The reason for this is simple: the current system is outdated and in need of modernization. Considering that the framework was last updated in 1994, this is hardly surprising. A lot has changed in the intervening years, and the system needs to be updated to reflect that.
Some of the specific concerns that have been raised include:
- The framework does not take into account the changes in costs of cattle operation
- The process for setting rates is not responsive to market conditions, resulting in inefficient use of public land
- The use of outdated zones and formulas is not reflective of current grazing practices
In light of these concerns, the Government of Alberta has embarked on a review of the grazing rent, license, and permit framework. The overarching purpose of this, as dictated in the Public Lands Modernization (Grazing Leases and Obsolete Provisions) Amendment Act, is to support range sustainability, while also ensuring that the system is fair, transparent, and efficient.
New Grazing Rates in Alberta
In a nutshell, these are the grazing dispositions affected by Alberta’s new rates:
- Grazing leases
- Grazing license
- Grazing permits
It will not, however, affect dispositions such as forest reserve grazing permits, head tax permits, and provincial grazing reserves.
The Alberta government has created 2 grazing rental rate zones, based on ecoregions, to help farmers in the province. They are divided by the North Saskatchewan River, with Zone I being to the south and Zone II being to the north.
The new rates (and phased in rates for 2022) for each zone are as follows:
|Zones||Old minimum rate/AUM||New minimum rate/AUM||2021 phased-in rate/AUM||2022 phased-in rate/AUM|
|Zone I (Southern and Central Alberta)||$2.31 – $2.79/AUM||$2.30/AUM||$2.95/AUM||$3.25/AUM|
|Zone II (Northern Alberta)||$1.39/AUM||$1.30/AUM||$1.74/AUM||$1.94/AUM|
These rates will be put into effect for the duration of a 5-year period, during which time the government will undertake a review of the grazing rent, license, and permit framework. Any changes during that period will be made through regulation.
What’s an Animal Unit Month (AUM)?
An animal unit month (AUM) is a measure of forage consumption. One AUM is the amount of forage required to sustain one cow (or the equivalent) for one month.
To give you some idea of what that looks like, in practice, a cow and her calf would consume approximately 1.5 AUMs/month.
What Does This Mean for You if You’re Thinking of Buying Grazing Land for Sale in Alberta?
If you’re thinking of purchasing grazing land in Alberta or are currently leasing one, it’s important to be aware of the new rates that are currently being phased in. These rates will likely have an impact on the value of grazing land, as well as the cost of operating a cattle operation.
Bear in mind that these rates are only for the duration of a five-year period, after which they may be revised. So, if you’re buying grazing land with the intent of holding it long-term, it’s important to keep an eye on future changes.
This is a complex issue and one that we will continue to follow closely as the review process unfolds. In the meantime, if you have any questions about grazing land for sale in Alberta, please don’t hesitate to contact the Hansen Land team. We would be more than happy to help you out.