A looming wave of farmer retirements could prompt a massive transfer of assets and land to the next generation, who may or may not decide to invest in agriculture.
“If we don’t facilitate this transfer of assets and make it happen as smoothly as possible, the outcome of failure will be fairly significant because we will start to lose critical mass in some market areas and loss of experience in human capital,” said Dale Kaliel, Alberta Agriculture senior economist.
The department polled 687 farmers in a telephone survey to assess rural demographics and producer willingness to take risks, adopt new practices and develop business plans.
Read Also
Research looks to control flea beetles with RNAi
A Vancouver agri-tech company wants to give canola growers another weapon in the never-ending battle against flea beetles.
The unpublished results were presented Nov. 17 at an Agriculture and Food Council conference on agrifood investment in Calgary.
Most farms are sole proprietorships, but more partnerships and incorporated businesses are appearing.
Seventy percent of the respondents were older than 50 and one-third had gross farm income of more than $250,000 but less than $500,000.
Forty percent of those surveyed said their income had declined in the last three years while 25 percent said their income had increased. The rest said income had stayed about the same.
Forty percent derived their income from livestock, 35 percent were strictly crops and the rest reported mixed operations.
The survey found older farmers prefer to protect their assets but felt learning to manage risk well would have be positive for their business.
The incoming generation is more willing to pursue and accept risk but wants more information to keep pace with the changes they need to make.
Half wanted lower risk, which Kaliel said makes sense when correlated with old demographic.
“They are more about protecting assets as they move toward retirement,” he said.
Crop growers appeared more willing to go out on a limb, while mixed farmers and livestock producers were less eager.
“Generally speaking, the livestock folks in aggregate take less risk.”
Two-thirds said they want new and improved ways to control their costs. Most believe Alberta Agriculture should offer more extension services for education and training in business analysis and management.
For many, improved profits may come from more specialization or diversification, including different crops and new production methods.
Many rely on experience and self-directed research to answer business management questions. Half said they buy crop protection insurance and some use market consultants.
“We have an older age demographic that is still using some of the tried and true methods,” he said.
“There is still a large focus on managing production risk versus business risk.”
More are pre-buying inputs such as fertilizer and seed or hiring custom operators to seed or harvest.
Twenty percent said they sign specific production contracts. Others hold onto commodities, waiting for prices to improve.
Twenty-four percent said they had formal written business plans, up from 16 percent in the previous study in 2006.
Half had completed high school, but the number who said they had some post secondary education increased from 2006.
