With the average age of 55 for Canadian farmers, there are now more farmers over 70, than under 35. Given that 92 percent of Canadian farms have no transition plan, there is no clear path to a resilient local food production system in Canada. Although there are some young people getting into farming, Canada has actually lost 70 percent of the farmers in its under-35 category in just 25 years. There are a lot of factors at play, however, the main issue is that smaller farms are getting too expensive to farm, and larger farms, too expensive for individuals to buy.
After living on a family farm for the last 10 years, I have a much better understanding of the challenges facing the viability of small family farms. Look online for inspirational quotes about farming, and you will find countless quotes similar to “Farming is not just a job, it’s a way of life.” Although this is supposed to be inspirational, as a farmer, that is the only way you can look at it, because if you got a job almost anywhere else, you would be getting better wages and benefits. In fact, the majority of farmers need a job off the farm to make ends meet. In 2014, the average B.C. farm family made $110,000 — but only $8,000 of that came from farming.
In Pemberton, there have been a lot of new farms with young people producing food for the local community. Most of farmers running these farms, including Camel’s Back Harvest that I operate with my wife, make less than minimum wage when considering net-income. Every year that we hired people to work on the farm, the workers were making more money on an hourly basis then we were. We ended up reducing the size of our farm operation to what we could manage between me working primarily off the farm, and my wife homeschooling during the year.
The government likes to add layers upon layers of rules and regulations that can make it hard for a farmer to keep up. The Water Sustainability Act in BC has farmers completing applications to have the authority to keep using water. Not only is the application process complicated, many of the inputs, and the overall cost of the water rights favour large scale operations instead of small local farm operations. The CanadaGap program is another overly bureaucratic and complicated process being imposed on farms. The “voluntary” program was meant for large farms that do inter-provincial trade, however, most large grocery store chains have adopted the program as a mandatory requirement for selling produce in their stores. The cost and time required to implement the program on a small farm is generally not feasible. As a result, many small farmers, including my in-laws, that were selling local produce through their local grocery stores have been shut out. Another issue are marketing boards that control quota and dictate who can grow and sell most farm products are nearly impossible to get into for small operations.
On top of the long hours and little pay, overly complicated and mounting number regulations to follow, there are a lot of other risks in farming: the weather is behaving erratically, exports periodically flood the market, the dollar fluctuates widely, new equipment purchases and subsequent repair bills are getting ever more expensive, etc. It is not uncommon that farmers lose money in any given year. To cover the bad years, many farmers borrow against the rising value of their farm properties, a practice that increased by almost 40 percent per acre between 2011 and 2016. Instead of having a farm to pass on to their kids when they retire, many are forced to sell, as the kids or grandkids can’t afford the debt.
Even for those farmers that do manage to pay off their debt, many do not have retirement savings. Since it’s a way of life, they often don’t retire, either because they don’t want to or because they can’t afford to. If they’re lucky and the land prices have increased, they can sell the farm to a developer, speculator, investor, rich person wanting a big house and property, etc. In most of those cases, the buyer seldom has the intention of keeping the farm business going. This often goes against the values of the farmers. If they want to sell to their kids or to another potential farmer, they often need to sell it at a much lower price since farming income often can’t cover the cost of the farm (at least here in B.C.).
The Pemberton Valley is a good example of the result. Many farm properties are being sold to the rich that want a big house on a big property. They sometimes allow farmers to rent their land, but generally with large restrictions on what they can grow. They only allow that because it provides them with a break on their property taxes. In the end, there is little food grown on those farms. Often only hay being used to feed horses. We end up growing houses on farmland instead of food.
Canada will continue to produce a lot of food from its large farms. It will just be larger corporations buying and farming larger land holdings. We will continue to see a slight downward trend in the total land area that is farmed, and a steep decline in the number of farms as shown in the following figure from Statistics Canada. Farms are a good investment. Farmland has given investors strong yields, low volatility, negative correlation to equities, and a resilience to economic cycles, which is increasing its acceptance as an institutional asset class. It’s not just a Canadian trend. Billionaires have been busy buying farmland in the US with Bill Gates now being the largest private farmland owner in America.
The problem with large corporate farms is that they are growing food as a commodity. They get very good at producing one or two crops, then sell it to the highest bidder on the world market. Like most every other large corporations, their number one priority is to make a profit. With a changing climate, relying on large industrial farms that are producing single crops is not very resilient or sustainable.
What’s the solution? With the scale and depth of the problem, the solutions will need well thought out legislation. Similar to housing affordability, or climate change mitigation, we need to quickly figure out what we want the future to look like, and implement policies that will actually get us there. Wishful thinking will not cut it. How can farmland remain affordable to farm? How can legislation be better tailored to different size operations? How can we make it a requirement for grocery stores to sell produce from small-scale local producers?