Buying Farm Equipment in BC
The type of equipment your farm needs will depend on what you want to grow – but you may find yourself looking for anything from trucks, tractors, and ploughs to seeders, fertilizer spreaders, sprayers and mulchers. Create a detailed inventory of farm machinery as part of your business plan.
If you’ll be producing the same type of crop or product for many years, buying agriculture equipment upfront may be worthwhile. There are plenty of farm equipment dealers in the Fraser Valley, with owners who speak multiple languages. Be sure to take into account the cost of tax, insurance, maintenance, and fuel over the life of the equipment. One big advantage of buying? Owned equipment is an asset – and each payment you make builds equity (unlike with leasing). You can also rent owned equipment to other farmers when it isn’t being used, which brings in extra income.
Other things to consider:
- Buying used: While a brand-new tractor or plough may be tempting, sometimes used farm equipment is more cost-effective. Check web classified sites such as Craigslist, Kijiji, and Auto Trader for agricultural equipment for sale. Just be aware that used equipment may need more repairs than new (great if someone on the farm is adept at tinkering; not so much otherwise). Used equipment may also be more expensive – and scarce – than you’d expect, due to the high number of farmers buying equipment in Surrey, Langley, and Abbotsford.
- Financing: For large purchases, you may need a loan – especially if you want to keep cash available for other purposes. Banks will normally finance a new piece of equipment over 7 to 10 years; used equipment over a maximum of 5. The Canadian Agricultural Loans Act program provides guarantees for equipment loans, and may be able to help keep your interest rate down.
Leasing Versus Buying Farm Equipment
While leasing generally costs more in the long run than buying, there are several advantages:
- Lower upfront costs.
- Access to top-of-the-line equipment that’s less likely to break down.
- Shorter-term commitments, which give you flexibility to match your equipment to your changing needs. Equipment leases typically run between 3 and 5 years.
If you’re planning to lease farmland, you may also be able to lease agricultural machinery from the same Fraser Valley landowner. Talk to the owner early in the lease process to learn what’s available.
Find farmable land in the Fraser Valley now.
Sharing, Borrowing, or Renting
Consider cooperating with local farmers to use their equipment. While certain tools and agriculture machines may be in operation too often for you to borrow, some farmers will make their farm machinery available at affordable rates – with or without an operator. You may also be able barter equipment use for other services.