Maintaining young farmers requires further action

The last few years have been good for agriculture, giving rise to considerable positive press and much discussion about a resurgence in interest from young people.

Young farmers are turning out at a great rate at farm shows across Western Canada, full of intelligence and enthusiasm. Yet the official numbers from Statistics Canada tell a different demographic tale.

Last week’s Statistics Canada report, entitled Demographic Changes in Canadian Agriculture, takes the farm census of 2011 one step further and compares it with numbers from 1991. It shows that there has been a precipitous decline in the number of farmers younger than 40. Younger farmers, predictably, also own smaller and less profitable farms than older ones.

The number of farms where the oldest operator was younger than 40 dropped nearly 75 percent between 1991 and 2011, from 74,159 to 20,299 farms. They make up just 10 percent of the total, down from 26.5 percent 20 years earlier.

Obviously, a lot of the farmers who were 40 then are 60 now, and still farming. The percentage of farmers 55 and older has soared to 55 percent, up from 37.7 percent. 

What remains unclear is how many younger farmers are in family partnerships with their older relatives, and how that is, or is not, reflected in the statistics.

The large percentage of older farmers is not surprising considering the rapid aging of Canada. Businesses of all descriptions are facing challenges in terms of turnover. However, a low number of young farmers could be culturally devastating to rural Canada.

“As the number of younger farmers continues to shrink, it is also reasonable to expect that significant amounts of farm assets will be bought by remaining farmers (increasing the number of larger farms) or may also be purchased by beginning farmers, private investors and immigrant farmers,” Statistics Canada said in its report.

Having young farmers entering the business and maintaining family farms are positive goals, but a new vision for assisting them would be helpful. 

The largest problem has long been high-barrier entry points into the industry. High land prices mean a down payment on a farm big enough to yield profits could be in the million dollar range. Few young people have pockets that deep.

Most young people, then, must either leverage their parents’ holdings or wait until they retire. Farm Credit Canada has been helpful in coming up with creative ways to provide credit to young farmers, but there still must be some equity to leverage borrowing.

Retiring parents cannot always afford to give land to their children. They need a return on their investment to fund their retirement years. Therefore, most young farmers must still come up with funds to take over the family holdings.

There are few options to lure young people onto the land. One is to find new avenues of capitalizing young farmers, and that may require some kind of public support.

There must also be a dedication to proper succession planning by older farmers. Because they must see some return on the transfer of land, older farmers are doing the next generation a favour by engaging in careful tax planning to ameliorate capital gains.

The bald fact is that if Canadians want to have family farms, they may need to support them. In good years, all is well. In bad years, when it’s hard to pay the mortgage and the loan on the combine, a better support system would be necessary to keep young farmers above water.

Otherwise, farms will simply get larger and be owned by companies instead of families. Canada must decide.

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