Out of the more than 200,000 Canadian farms counted by Statistics Canada, fewer than 14,000 have a reasonable chance of making an adequate family living from farming, says a new report from the Ottawa-based and government supported Canadian Agri-Food Policy Institute.
The remainder have gross revenues too small to reasonably expect to support a family without outside help, says the report.
They then depend on off-farm income or government support.
CAPI says future farm policy should aim at commercial farmers with the prospect of making a living. It says the current low-end cutoff of $10,000 in gross revenues is far too low when designating who is a farmer.
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And it calls for a radical change in the direction of farm policy including regulatory reform, generous competitive government subsidies for biofuel plants, more harmony with American food industry rules, marketing research, trade agreements to open markets and a policy by Canadian governments to promote agriculture by buying local and making Canadian content a part of domestic food supplies.
But as a starting point, CAPI says policy should be revamped to support research, innovation and connections among “value chain” players rather than farm income. Policy should be designed to support commercial farmers.
“There were fewer than 15,000 farm operations that had sales over $500,000 in 2004 which would generate net profits of $75,000 based on a 15 percent net profit margin,” said the report titled Moving Forward on Vision and Action for Canadian Agriculture. “For many full-time business model operations, this sales volume is the minimum required to generate a reasonable income to support a household after considering operating expenses.”
CAPI bills itself as an “independent voice” in farm policy analysis, but it has deep connections to Agriculture Canada. It receives financial support from the department and the private sector, is led by former senior Agriculture Canada officials and has its office in an Agriculture Canada building at the Central Experimental Farm.
The CAPI report said the next generation of farm programs being designed should make a historic shift in the way farmers are supported.
“Government policy directed at the farm sector should be based on the business-focused farmer and their needs (infrastructure support and so on),” it said. “Government expenditures to support incomes, rather that stabilize income, is counter-productive as these income-support expenditures do not remain in the farm sector; rather the net effect is that these benefits accrue with input suppliers and users of the products.”
The report argues support payments “raise the cost profile and potentially lower returns.”
It says agricultural programming traditionally has been dedicated to maintaining past policies and the status quo, while “stark and bold” changes are necessary if agriculture and rural Canada are not to descend into long-term decline.
