There are pros and cons in the sharp rise in farmland values on the Island, the P.E.I. Federation of Agriculture's president says.

David Mol was reacting to news Monday that average prices for farmland on P.E.I. rose by 13.4 per cent in 2016 — the largest jump in the country, according to a new report from Farm Credit Canada. 

"I think overall it's good news for P.E.I.'s economy," said Mol, who farms grain, wheat and soybeans in Winsloe. 

"We've been lagging far behind other major, good crop-growing areas in Canada," he said. 

However, higher prices will make getting into farming more difficult for young farmers who aren't inheriting land, he notes. 

'Dark side to it'

"This is, of course, a good news story that has a dark side to it as well," Mol said. 

David Mol

'I think the whole province benefits,' from higher farmland values, says P.E.I. Federation of Agriculture president David Mol. (P.E.I. Federation of Agriculture)

"Depends whether you're a buyer or a seller. But I think overall, any time that there's market reports that come out that say that prices are stronger, especially tangible assets like land or real estate, I think the whole province benefits — benefits from a tax point of view. Agriculture will adjust to it." 

The federation has been calling on the province to consider setting up a land bank that farmers can lease land from, like it had decades ago.

With files from Laura Chapin