Finding farmers for the missing economic middle

There’s a growing hole in Canadian farm economics and filling it could be key to long-term farmer viability.

Instead of a wide distribution of farm sizes from small to large, with most sitting somewhere in the middle, Canadian farms seem to have split into either the very small or very large.

That’s an observation made by Guelph economist Al Mussell of Agri Food Economic Systems in recent research notes, and he views the implications as potentially dire.

Without medium-sized but still significant farms to purchase used machinery, will large farmers have trouble financing their high-capital operations? New machinery finances count a lot on used machinery values.

Without significant numbers of medium-sized commercial farmers, will farmers in general have any political weight locally, provincially or nationally?

What happens in a future in which a handful of gigantic farms fight over the diminishing number of acres coming up for sale, and the medium-sized farms give up on trying to expand?

I get the sense Mussell thinks a crucial inflection point is approaching, where there might be so few commercial farms left that the idea of them being part of a “farm community” becomes unviable. That would have widespread effects.

For sure, farms have been expanding since the Prairies were colonized and broken. In each province hundreds of thousands of farmers have instead become a few thousand significant commercial operations, and there are no signs that consolidation is slowing, especially with a landowning generation aging out. The consolidation has gone on steadily, so there’s nothing new there.

But there’s an underlying reality that can’t be denied: the Prairies have only so many acres, and at a certain point all farms will be merged into one, like the super-giant black hole at the centre of our galaxy, or a commercial aristocracy of gigantic, well-financed, entrenched mega-farms will rule.

That’s if the present, century-long trend continues.

Is there another way? That’s what Mussell wants to see. He wants nothing done to undermine the largest farmers, but wants something designed to help midsized farmers to find enough return that they can continue to follow along behind the largest farmers, as they once did. Today they’re just quitting. That leaves a gulf between tiny, specialized farms that aren’t in the commodity business at all, and those who do nothing but high volume, high capital, intensive production.

Mussell doesn’t have easy answers, but I feel like I’ve been seeing a potential third way in the people I’ve been profiling in my Improving the Prairies series.

While the focus of the series is upon farmers who are finding ways to protect their soils, water and natural habitat, while providing a sustainable production and financial system for their farms, one thing I’m noticing is how they all seem to be intuitively evolving into low-risk, low-input, profit-intensive operations.

Whether they’re mixed farms, or cattle-only operations, or input-dependent monocultures, all seem to be trying to build themselves up by getting more out of the same soil, water and environment, rather than focusing on buying that next quarter section.

Instead of entering the battle royale of the giant farms, they’re looking at the resources they’ve got and figuring out how to maximize the return on those. With improved management and constant tweaking, profitability should incrementally scale-up, hopefully in a similar way that a giant grain operation can achieve by adding extra acres with slim margins.

Many of the farmers in the regenerative agriculture movement seem to embody this outlook. You can read about some of what they discussed in stories on pages 14 and 15.

But over the years I’ve seen this outlook also embraced by farmers in other areas where acres expansion seems impossible, where margins on bulk commodity production are narrowing, and another way forward needs to be found. That can mean adding a livestock operation, or processing, or a specialty crop on a limited number of acres. That’s always been called “diversification,” and often failed, but the notion is vital if we want to avoid the One Farm to Rule Them All scenario.

There are also innovative approaches being developed, such as storing water in the spring to use as irrigation in the summer or for fish farms, and creating low-cost greenhouses that could add months to the dreadfully short western Canadian season. Turning the Prairies’ problems, such as flooding, drought and the short season into opportunities that can be exploited to get more production and more return from the same land base could be the golden key to unlock the ability of farms to exist and thrive between the tiny specialized operations and the gigantic bulk commodity producers.

Will that develop naturally, through thousands of farmers’ commitment and insight? Can it be encouraged by government policy or farm organizations? Is it a forlorn hope for a reality that can’t ever be realized?

I’ve got nothing against the biggest Prairie farms. They are some of the best agricultural operations in the world and we should be proud of them.

I’ve got nothing against small, specialized operations. Those are developing new markets and creating value out of Canadian agriculture that didn’t exist before. They add greatly to Canadian farming and are another path forward for those who want to farm but can’t buy sections of land.

But a way must be found for farms that are full-time, commercial operations, who want to be involved in bulk crop and livestock production, to survive in the business well enough that they last and continue on. They’re the glue that holds the farming community together, and if that glue disappears, the community could fall apart.