Producers often have a deeper connection with their work than in other industries, which can keep them farming longer

According to Statistics Canada, the number of farms in Canada is dropping, the average size of the farm is increasing, and the average age of the farmer continues to rise.
This means that while fewer people are farming, they are also taking on bigger operations and for longer.
Older Canadians working longer is a common trend across the Canadian industries, says social gerontologist Suzanne Cook. She sees two reasons for older Canadians working later: either for financial necessity or because they enjoy what they do. The statistics aren’t there to decide which is more prevalent, she says.
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For farmers, there is a deeper connection with their work compared with other industries, which could be part of the decision that makes them want to keep working later in life.
“Farm families create thriving communities and they’ve built this legacy that has taken decades. That’s really meaningful work. And it’s a way of life,” says Cook.
And that way of life does mean a different way of saving for retirement, says Nathan Saretsky, an agriculture transition specialist with Farm Credit Canada.
“The farm takes so much money to operate. That money is building equity into their farm but it’s not necessarily building cash.”
Revenues and expenses also vary, which can affect where farmers put their money on an annual basis.
If someone owns a McDonald’s, they know what their income is going to be on an annual basis, says Saretsky. Farmers do not have that security when weather, commodity prices, and expenses fluctuate from year to year.
More than likely, farmers are investing revenue back into their operation rather than investing in their retirement. Again, this is different than other industries where working for a more structured business means automatically paying into pension and employment insurance.
“They feel they need that money next year,” he says.
“It’s hard to think long-term because there are so many variables.”
One of the good things that has come out of these trends is that land values have increased overall. According to Statistics Canada, land value has risen 38.8 percent from 2011 to 2016 with the average value sitting at $2,696 per acre.
For farmers looking to retire, that means there is value in their land that they can use to retire on, either through sale or renting. However, the large downside to that is the difficulty to enter the market as a new farmer.
If you’re not inheriting a farm, young or new farmers are finding it nearly impossible to start from nothing, says Saretsky.
This could account for the lack of growth within other age groups of farmers but it is not for lack of enthusiasm or farming knowledge, says Wally Johnston of Bonnefield, a Toronto land investment firm.
“There is a great enthusiasm across the country for younger farmers to take over the farming operation and a great willingness from the older generation to pass the torch. Access to capital was and will continue to be the greatest challenge to agriculture in this country.”
Bonnefield manages 125,000 acres of farmland and works with 125 to 150 farm families across the country. According to their research, 38 percent of land farmed in Canada is farmed on a lease basis.
According to the Statistics Canada report, A Portrait of a 21th Century Agricultural Operation, younger farmers are more likely to lease land than buy land.
“Starting or growing an agricultural operation requires a significant investment, and choosing to rent land can be a more flexible and less capital-intensive way for farmers to establish their operations,” states the report.
It is not unreasonable to think that most of that leased land is owned by retired farmers, says Johnston, but there is risk there for those younger farms who are renting the land.
“When that land that they currently lease comes available for sale, they’re not going to be able to buy it at all. And yet high percentages of beneficiaries of the estate will not want to continue on with this lease arrangement with this farm family. Rather their goal is to sell the land.”
Farmers want and need their operations to grow, says Johnston, and capital constraints are the biggest hurdle both now and in the future.
For businesses that provide land investment opportunities for young farmers like Bonnefield, they financially support long-term leases to provide capital for young farmers starting or expanding their farm.
Young people want to take over for retiring farmers, says Johnston, but that capital barrier will continue to be a challenge.
“The capital cost of farming is so large, it’s a roadblock to young folks starting or expanding their farming operation. All these things are prohibitive to young people coming into the business of farming, even though the business of farming itself certainly can be a lucrative business venture.”
