The Fraser Institute

The Fraser Institute

October 19, 2009 09:30 ET

The Fraser Institute: BC's Agricultural Land Reserve a Costly Failure Responsible for the Most Expensive Housing Costs in North America

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 19, 2009) - British Columbia's Agricultural Land Reserve (ALR) has failed to sustain family farms as intended and instead has helped make the Vancouver housing market one of the most expensive in North America, concludes a new study released today by the Fraser Institute, one of Canada's leading economic think tanks.

"The Agricultural Land Reserve is a social engineering experiment gone awry. It has not shielded British Columbia from global agricultural trends, but it has deprived property owners the free use of their land, diminished the housing choices of families, and created barriers to upward mobility," said Diane Katz, author of The BC Agricultural Land Reserve: A Critical Assessment and Fraser Institute director of risk, environment, and energy studies.

Meanwhile, ALR officials have allowed government entities to remove twice as much property from the reserve as land owners, reflecting the arbitrary-and politicized-nature of the BC land-use controls.

Proponents of the ALR, which was created in 1973 by the NDP government of then premier Dave Barrett, have variously argued that government control of farmland is necessary to protect family farms, preserve green space, and ensure a local food supply.

Decreasing number of family farms and rising housing costs

The provincial ban on the subdivision or development of the 4.7 million hectares that constitute the reserve has not halted the decline in the number of BC farms, nor has it nurtured a new generation of farmers. The number of farms in BC has declined nine per cent since 1996, while the number of non-family corporation farms has increased 7.7 per cent. The proportion of owner-operators is also falling, with the total amount of BC farm area rented or leased growing by 35 per cent between 1986 and 2006.

The study finds plenty of evidence showing that the farm sector was expanding to meet the demands of a growing population long before the land reserve was imposed. In the midst of a post-Second World War housing boom, farm area in British Columbia actually increased 29 per cent between 1951 and 1976. Moreover, the land area for vegetables increased 604 per cent between 1921 and 1976, the number of cattle increased 230 per cent, and hens and chickens increased 397 per cent. In fact, there was more farmland dedicated to field crops and vegetables before than after the advent of the Agricultural Land Reserve.

Land scarcity and the high costs of housing in Vancouver have reduced the number of families in the city. A total of 26 per cent of the people in the region, but outside of Vancouver itself, are under the age of 20, but only 18.6 per cent of the people in Vancouver are under the age of 20.

Younger families at the beginning of their careers, and thus at the lower end of the income scale, are hit particularly hard by higher housing prices. The study cites census data showing nearly 54 per cent of Vancouver-area homeowners under the age of 25 paid 30 per cent or more of their income on shelter compared to about 19 per cent of those aged 55-64.

Fewer merits to locally produced food

The study also examines the claims that farmland needs to be protected to ensure British Columbians have a safe, local food supply.

"The current fashionable stream of thought is that locally produced food is safer, healthier, and better for the environment. But evidence clearly shows this is fanciful thinking and many BC consumers have shown an undeniable preference for a greater choice of products," Katz notes.

The study found that the majority of BC consumers buy great quantities of imported food and base their purchasing decisions on a range of factors, including price, variety, and convenience, rather than simply product origin.

As for the idea that locally grown food is more environmentally beneficial, the simple notion of adding up so-called "food miles"-the distance food is transported from where it is grown to where it reaches the consumer-does not account for the variety of inputs necessary for agriculture, such as energy, irrigation, and fertilizer. Consequently, foods grown outside the province may, in fact, have less environmental impact. The study also cites other research showing that the most significant cost of food miles is consumers' shopping trips to the store, and not the commercial distribution of food. To the extent that more consumers rely on unprocessed, locally grown agricultural products-thereby necessitating more frequent trips to the store and driving longer distances to farms and farmers' markets-the more food miles would increase.

The so-called "localism" movement, which advocates local production and consumption of foods and other products, also fails to account for the comparative advantages of Canada's trading partners. These advantages allow Canadians to enjoy plentiful quantities of coffee and bananas from Colombia, wine and cheese from France, gin from Britain, and rice from India, among other imports. Conversely, Canada produces a variety of products more efficiently than others do elsewhere. Agriculture exports from BC, totaling $1.6 billion in 2008, generate income for farm investment and employment.

Technology and reduced need for farmland

Advances in agronomy and biotechnology have also dramatically increased yields, thereby easing demand for farmland. Reflecting a process of land substitution, for example, BC's greenhouse area grew 31 per cent between 1986 and 2006. After three decades of the ALR regime, BC farmers produce just a third of the food needed in the province to meet the standards of a healthy diet.

"While some advocates regard the ALR as sacrosanct, British Columbians should be questioning the legitimacy of a regime by which government deprives property owners of the use of their land-and the public the tremendous benefits of markets-in order to indulge special interests who expect everyone else to shoulder the costs of their preferences," Katz said.

The complete study is available for download at

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The Fraser Institute is an independent research and educational organization with locations across North America and partnerships in more than 70 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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