Saving the mid-sized farm | Farmtario

Statistics Canada data indicates the number of mid-sized farms continues to decrease while comparatively large and very large farms gain in size and number.

According to analysts at the Canadian Agri-Food Policy Institute, a Guelph-based agricultural economics think-tank, the trend poses risks for the sector as a whole.

The question is: what could stop the attrition of mid-sized Canadian farms?

Mid-sized farms face greater cost barriers

A policy paper published by the Institute on Nov. 2 makes the case that Canada’s agricultural community has taken farm institutions and conventions for granted in terms of how they work, as well as how fixed they are. This includes road safety requirements for equipment and equipment operation, different labour and workplace safety standards compared to other industries, as well as how dispute resolution processes, marketing boards, and a variety of other sector-specific institutions work.

Why it matters: The current structure of Canada’s agriculture sector generates costs for farm businesses that become disproportionally significant barriers for small- and medium-sized operations. Solutions need to be found if the country is to maintain some level of diversity in farm size.

“We have an institutionalized understanding where those things haven’t really been a problem for us, so far as I can tell, but they have been unique [to the sector],” says Al Mussell, research director for the institute and author of the paper.

“As we evolve in a way such that farms as commercial businesses seem to be further removed from households, those exemptions, dispute resolutions…it’s going to be harder to wash. As that happens it builds costs into the system.”

Those costs, Mussell believes, are likely one of the factors contributing to the comparative unviability of mid-sized farm operations. Whereas large farms can leverage capital to, for example, absorb the high costs of new technology, purchase more quota, afford to navigate labour regulations and so on, smaller operations increasingly cannot under current frameworks, leading to inevitable casualties.

There’s a converse problem as well. As farms get larger and seemingly more removed from the household — an image which Canadian farm families greatly benefit from — policy makers and the wider public may find it increasingly difficult to allow Canadian agriculture to maintain its own parallel rules and institutions.

“These are very nuanced issues. It’s not like large farms actually are disconnected from households, but the perception is that they are separate,” Mussell says. “It’s a tough discussion to have in some ways, but nonetheless, it is happening…. It’s an issue kind of hidden in plain sight.”

Differing farm sizes require different support systems

Reminding ourselves institutions, policies, and long-standing conventions are subject to change, and in fact might need to be changed to adapt to current socio-economic realities within the sector, is thus required.

For Mussell, the difficulty lies in determining how changes that support smaller farm businesses can be enacted without handicapping large operations — the latter being integral to the efficiency and competitiveness of the sector as a whole. The recommendation is instead to build dialogue “around renewed collaboration and institutions to facilitate a renewal of diversity.”

Mussell suggest a number of potential avenues that could be investigated: making it easier to enter quota-controlled markets; easing the burden of equipment costs; sharing machinery ownership; and expanding dispute resolution options.

What’s best is unclear. However, Mussell believes any action must start with greater awareness that current trends in farm structure should be expected to bring disruptive changes. If these are to be reduced or avoided, institutions within the sector must be serviced, maintained, and redeployed.

“A focus on supporting the mid-sized farms – through facilitating collaboration between producers to offset size disadvantages, or to support farm products marketing efforts that are more amenable to mid-sized farms – would seem consistent with this,” reads the paper’s concluding paragraphs.

“It will be absolutely critical to not discriminate against the large. Large farms have not expanded as the middle size has declined out of some nefarious intent…The large farms are best positioned to adopt the latest technology, account for the preponderance of farm cash receipts, and anchor food supply chains. Discriminating against them would be highly counterproductive.

“Anticipating the difficulties and addressing options for government policy and new roles for grassroots agricultural organiza- tions will be nuanced and require extensive dialogue. This needs to occur.”

The full policy paper is available online.