Fall of the Canadian farm

Globe and Mail Update
Wednesday, May 15 – Online Edition, Posted at 2:44 PM EST

Almost 30,000 farms went out of business across Canada in five years, a report released Wednesday says.

The 2001 Census of Agriculture counted 246,923 farms in Canada on May 15, 2001, down almost 11 per cent since 1996. This represents the fastest percentage decline between censuses since 1971. All provinces shared the decline, with eight of the 10 showing decreases of greater than 10 per cent.

    Highlights of the census
  • Number of farms down 10.7 per cent to 246,923, from 276,548 in 1996.
  • Farms grow in size - 273 hectares from 246 - and earning power.
  • More diversification as wheat declines 12.6 per cent.
  • Livestock numbers hit new high with hogs nearing cattle.
  • Expenses climb to 87 cents for every dollar earned from 83 cents.
  • Environmentally friendly tilling hits new high of 60 per cent.
  • Greenhouse industry increases 42.1 per cent, Ontario dominates.
  • Wine industry booms as grape acreage increases 41.9 per cent.
  • Blueberries top apples again for fruit growers. Canadian Press

The new statistics continue a trend that has seen farm numbers continue to drop for the past five decades.

"We still have a fair number of smaller farms," said David Culver, chief of farm data and analysis for Agriculture and Agrifood Canada. "I think you could see a bipolar distribution situation happening, where you'll have massive farms and a lot of hobby farms where people live for lifestyle reasons rather than trying to make a living out of it."

"Farmers on medium-sized farms have the most difficulty. The farms aren't large enough to make a living off of, but they're large enough to interfere with getting other employment."

The census includes farms of all economic sizes, from hobby farms to large corporations.

For every 10 Canadian farm operations that "counted themselves in" in 1996, seven still existed in 2001, while three had left the agriculture sector. On the positive side, 50,000 operations started up during the period.

One of the main reasons for the drop in farm numbers is the challenge that farmers face in trying to manage their expenditures to remain competitive.

The portion of a dollar represented by expenses is growing. In 2000, farmers spent an average of 87 cents on operating expenses (not including depreciation) for every dollar of gross farm receipts. In 1996, the ratio was 83 cents in expenses for each dollar in receipts.

The smallest farms, those that brought in less than $25,000, spent $1.68 in operating expenses for every dollar in receipts. Many farms in this category are hobby farms.

"The ability for the small family farm to generate a full family income is getting less and less," said George Brinkman, an professor in agricultural economics at the University of Guelph. "We're getting more farmers who run small operations and have other jobs. This census is saying the margins are continuing to decline and it's not likely to reverse itself."

Only 25 per cent of farms in the lowest income group had greater receipts than expenses.

Those in the largest receipts category ($250,000 and over) spent 85 cents for every dollar they received. In each of the receipts categories, however, farmers spent more to earn a dollar in 2000 than they did in 1995.

The only category of farms to show growth over the five years was those operations with $250,000 or more in receipts. They represented 34,139 farms, an increase of 32.0 per cent from 1995. While they accounted for only 13.8 per cent of all farms in Canada, they had 68.1 per cent of all gross receipts reported for 2000.

"If you look at what size a farm you have to be before your profit numbers increase, it's about $125,000 in sales in most provinces," said Wilson Freeman, a project manager for Statistics Canada. "Under that figure, we've lost a lot of farms since the last census. The numbers show smaller farms have poor cost structures."

Over the five-year period between 1995 and 2000, the prices that farmers received for their products declined by 4.6 per cent, while prices they paid for expenses such as fertilizer and fuel increased by 10 per cent.

"Agriculture operates with narrower margins than most industries," Mr. Freeman said. "They also have to deal with whether factors that other industries don't have to take into account."

While the report says the number of farms has declined, the average farm is getting bigger.

Nationally, farmers reported that they had 89.9 million acres in crops in 2001, up 4.2 per cent from the previous census. The average Canadian farm grew 11.2 per cent, increasing from 608 acres to 676 acres.

"I would expect that we will continue to see farms getting larger and more specialized," Mr. Brinkman said. "These changes will continue in the farming sector into the next decade."

Where the farms are
 20011996Absolute changePercent change
Canada246,923276,548-29,625-10.7 %
Newfoundland and Labrador643742-99-13.3%
Prince Edward Island1,8452,217-372-16.8%
Nova Scotia3,9234,453-530-11.9%
New Brunswick3,0343,405-371-10.9%
British Columbia20,29021,835-1,545-7.1%

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