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Landlocked farmers in B.C. hoping to cash in on northeast shale gas boom

But they say restrictive agricultural land reserve rules designed to protect the province’s rich food production real estate are threatening their economic survival

Rick Pavlis’ family has been farming crops near Dawson Creek for nearly a century.

Between him, his brother and his parents, the family owns some 5,000 acres.

But you won’t find Pavlis tilling the fields these days.

“You can’t make it on farming; it’s too hard,” he said. “I’m focusing on oil and gas.”

Despite the fact that northeast B.C. is the province’s breadbasket, more and more residents are gravitating toward the petroleum industry.

That’s because energy companies from Alberta and the U.S. are moving into Peace Country to cash in on its rich shale gas reserves, setting the stage for a massive development rush.

Farmers near Dawson Creek and Fort St. John want in on the action, with many hoping to use their abundant land and heavy equipment to serve the industry and generate income outside of the growing season.

But the Agricultural Land Commission, which governs B.C.’s agricultural land reserve (ALR), often won’t let farmers subdivide their property or set up a business that’s not directly related to farming.

Pavlis said he applied to have 20 acres of his land taken out of the ALR so that he could expand his second business, but the commission wouldn’t allow it.

Farmers across northeast B.C. face a similar situation, he said, and many believe income from the oil and gas industry could help them keep their farms afloat.

Pavlis said a lot of farmers have set up second businesses in spite of the commission’s rules.

“Everybody’s doing it,” he said. “There’s a gold rush here; there’s an opportunity and people are saying, ‘F*** the agricultural land reserve, we’re doing it anyhow.’”

In an interview with Business in Vancouver, land commission chairman Richard Bullock said he doesn’t believe there are that many illegal businesses operating in the northeast, although he conceded that “some are possible.”

Even if they do exist, Bullock said the commission is too cash-strapped to pay for the resources it needs to ensure everyone is playing by the rules.

“We’ve been cut pretty severely in the last number of years, and our ability to do our job and do it well has been stretched,” Bullock said. “We’re getting to the point where we’re having a tough time meeting our mandate.”

When he was appointed to the commission last June, Bullock was immediately asked to complete a full review of the ALR, the first since it was established in 1973.

He spent several months travelling the province listening to residents’ concerns about the ALR.

He submitted his review to Agriculture Minister Ben Stewart last fall, but wouldn’t say what his recommendations were.

“I’m not at liberty to talk about them until the minister looks at them … it’s on his desk.”

The report has yet to be made public, and Stewart could not be reached for comment.

Meanwhile, residents in northeast B.C. continue to look to the oil and gas industry to keep their farms alive.

Speaking to BIV on the condition of anonymity, one farmer near Dawson Creek said he operates a rental equipment business on his land that is in direct contravention of ALR rules.

He wouldn’t be able to afford his farm without the second business, the farmer said, and the rental business doesn’t interfere with his farm’s production.

“Our farm grows just as many hay bales as it did before we started our oil field business,” the source said. “We haven’t decreased our agricultural production by one blade of grass, but we have created full-time jobs for seven people.

“If anything, side businesses allow people to stay in agriculture because in a lot of cases you’d go broke.”

The farmer said current rules allow him to have only four employees for a home-based business.

And his words for the government?

“I can line up my seven employees and you can pick the four that keep their jobs.”

Meanwhile, Pavlis shed light on another problem.

According to him, the government allows oil and gas companies to expropriate land from the ALR more easily than farmers can.

“We’re stuck here struggling on farms to make ends meet,” Pavlis said, ”and yet these guys are drilling right outside your doorstep.”

Irmi Critcher, president of the BC Grain Producers Association, said although she supports the ALR she wants the government to level the playing field for farmers.

“There seems to be one set of rules if you want to put an oil and gas plant or activity or a lease site on there … however, if a farm itself wants to separate a little 3.5-acre piece off they can’t do it as easily or they can’t do it at all,” Critcher said.

Bullock agreed that the regulations are different for oil and gas companies, but he doesn’t think they give the industry an unfair advantage over farmers.

Paul Gevatkoff, spokesman for Citizens for Agricultural Land Reform, said droughts in the northeast have made it especially tough on farmers in recent years, generating more discussion about changes that could be made to the ALR – his group is now up to 50 members.

But the politicians in Victoria have done little to fix the situation, he said, and citizens across the province resist taking land out of the ALR.

“They don’t get it … they think, ‘Jeez, you make any change and this whole thing is going to go off the rails, and we’re not going to protect our agricultural land’,” Gevatkoff said. “What we’re saying is we should be protecting it, but protect it where there’s some pressure.”

In other words, maintain the ALR in the Lower Mainland and Vancouver Island where prime farmland is scarce, but allow the northeast to make some changes where it’s abundant.

According to the commission, 50% of the ALR is in the northeast part of the province while the south coast accounts for only 4%.

Gevatkoff’s group has called for a five-year moratorium on the ALR east of the Rocky Mountains.

Critcher doesn’t agree with the moratorium, but wants the government to relax the rules somewhat to allow greater flexibility for grain farmers.

Bill Streeper, Fort Nelson’s mayor, said something needs to change or his town can’t grow.

Fort Nelson is nearly 400 kilometres north of Fort St. John, making it one of B.C.’s most northerly communities.

Streeper said his town is too far north for farming to be commercially viable and yet it’s surrounded by ALR.

That’s kept Fort Nelson essentially “land locked” amid an oil and gas boom.

“We have a call for labour,” Streeper said. “We are trying to obtain affordable housing, and we’re virtually stuck on land, which is driving existing residential land [prices] up fairly high.”

But a glint of hope has emerged amid the Liberal leadership race.

Gevatkoff said his group has made presentations to Liberal leadership candidates, and some have even expressed support for ALR reform.

None of the candidates could be reached to confirm their stance, though Kevin Falcon’s “Northern Prosperity” plan does include a line about reducing “onerous ALR processes on Peace region farmland.”

Meanwhile, in Dawson Creek, Pavlis and his family continue to grapple with ALR regulations.

He said farmers have been trying to get their point across to the government for years to no avail. And he doesn’t hold out much hope for the next batch of leaders either.

“That’s just another election ploy,” Pavlis said. “Why don’t you make some changes now? Why do we keep waiting and waiting and waiting?”

4.7 million – total ALR hectares

50% - percentage of ALR located in the north

4% - percentage of ALR located on the south coast

1.4 million – the total ALR hectares in the Peace River district, 2010

60,508 – total ALR hectares in Metro Vancouver, 2010

$100,000 – the maximum penalty for a single contravention of the ALR

Formed in 1973, the agricultural land reserve (ALR) is a provincial zone that sets aside land the government believes has the potential for agricultural production.

It was established to combat the loss of prime agricultural land to urban and other uses. The ALR covers approximately 4.7 million hectares across B.C.

The Agricultural Land Commission oversees the ALR, which is broken into six regional districts: South Coast, Island, Interior, Kootenay, Okanagan and North.

According to the commission, the ALR “takes precedence over, but does not replace, other legislation and bylaws that may apply to the land.”