Agricultural Myth Busting 101

In the spirit of April Fools’ Day, the Ag Economics team busts three myths about Canadian agriculture.

The Great Canadian Farmland Grab

The Myth: Investment companies, and the corporations they represent, are pulling the land out from under producers’ feet.

Busted! The Canadian Federation of Agriculture recently suggested that of the 160 million acres of Canadian farmland, fewer than 500,000 acres can be deemed “financial investments”. So farmland remains in the hands and under the feet of individual producers. Interest in farmland from non-traditional buyers is certainly an emerging trend, but farmland prices are largely driven by transactions between individual producers, not investors. One difference is that while Canadian farms remain overwhelmingly family farms, more families are incorporating.

Where’d all the young’uns go?

The Myth: Canadian agriculture is aging, and lacks a critical mass of young producers to sustain a successful agricultural sector. In 2011, operators 55 and older comprised the largest group for the first time with 48 per cent of operators. This is up from 32 per cent in 1991.

Busted! The number of farms is declining overall but the industry is growing. In fact, over the last two agricultural census periods, youngest producers make up a greater proportion of entrants than they do of exiters. As expected, the oldest producers are more likely to exit than to enter.  In this era of farm consolidation, it’s not surprising to find rates of overall exit from the industry that are higher than overall entry rates. But observing that more young producers are entering than exiting suggests a healthy outlook for the industry and a future filled with innovation and entrepreneurship.

Canadian food manufacturing can’t compete

The Myth: Facing a $6.8 billion trade deficit, Canadian food manufacturers are down and out.

Busted! That trade deficit is real and requires attention. But it’s not the whole story in food processing. According to a recent KPMG study, Canadian food manufacturers are among the most cost-efficient producers compared to other G7 countries. As well, the small and medium-sized plants that dominate the Canadian landscape had more plant investments and openings from 2006-2014 than the largest companies, helping to drive innovation in both processes and new food products.  

 

Martha Roberts, Economic Research Specialist