NIAGARA FALLS, Ont. – The present North American farm sector structure of tens of thousands of farmers competing for markets and dealing with a handful of suppliers and buyers is insane and should be rationalized, a Harvard University agriculture professor said last week.
In a presentation and later interview at the annual CropLife Canada conference Sept. 21, agriculture and business professor David Bell from the Harvard Business School said the present structure of small family farms is no longer appropriate if efficiency and sustainability are the goals.
“There are clearly some problems with farming,” he said. “From a business point of view, the farm system is insane.”
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He said the units are too small, management skills are too weak, financing often is inadequate and farmers are too production-oriented and too unaware of market and customer demands.
“There simply are too many farmers,” he said in an interview. “You need bigger units to attract better managers and more leverage.”
He said he understands Canadians have an attachment to maintaining the farm lifestyle but the present system makes no sense.
Bell said he agrees with the analysis that low commodity prices are in part the result of weak market power by producers.
“Bigger units clearly would have more bargaining power.”
However, he deflected a suggestion that this sounded like an argument for farmers to band together into co-operatives or marketing boards that give the collective more market clout.
“The problem is that farmer controlled groups often are reluctant to give enough authority to a manager needed to exercise that clout,” he said in the interview.
During his speech, Bell referred to Harvard case studies that contrasted large and low-cost farms in Brazil and Argentina with smaller and higher-cost operations in North America. In the future, increasingly “production will come from the most efficient locations.”
