Size doesn’t matter as much as marketing savvy and management skills when determining farm success, says a report from the Conference Board of Canada.
Canadian farmers should also be more open to innovation if they want to succeed, it said.
The Seeds for Success report from the Centre for Food in Canada is part of a three year conference board project to develop a national food policy to be unveiled next year.
The report argues that while farms are consolidating in Canada, larger does not necessarily translate into more profitability. By business standards, even Canada’s large multimillion-dollar farms are small or medium-sized compared to most other businesses.
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“Larger scale does not correlate with greater profit-making potential,” the report said.
“The question of how big these businesses will get is not as important as how successful they can become as businesses.”
It means meeting consumer food demands and rising expectations for quality, food safety and sound environmental practices, even though consumers typically are not prepared to pay a premium for these benefits.
Profitability “does not depend exclusively on scale, though it does depend on managerial sophistication, in particular the ability of farm managers to address critical issues relating to the management of capital, marketing, humans resources and relationships.”
The report was written by Centre for Food in Canada researchers James Stuckey and Erin Butler. It noted the growing pressure on food producers to be all things to all people.
“Canadians are increasingly concerned about the manner in which their food is produced with more and more people looking to farmers to provide foods that are cheap, safe, environmentally friendly and in keeping with a multitude of social and cultural values,” it said.
And often, it is smaller-scale farms with a close connection to their local market that manage these demands better.
The report said farmers of the future will have to begin their business plans by identifying a market and then producing to satisfy it. And they will have to become more proficient in managing and hiring qualified personnel.
The centre also concluded that farmers have a somewhat conservative attitude toward innovation with most not seeking to be first adopters but also not wanting to be the last adopters.
