COLUMN

Tough times on Canada’s farms

Canada’s farming community continues to shrink as international marketing pressures squeeze prices

DIANE FRANCIS September 4 1989
COLUMN

Tough times on Canada’s farms

Canada’s farming community continues to shrink as international marketing pressures squeeze prices

DIANE FRANCIS September 4 1989

Tough times on Canada’s farms

COLUMN

Canada’s farming community continues to shrink as international marketing pressures squeeze prices

DIANE FRANCIS

The Canadian Feed Industry Association held its annual meeting this summer in Winnipeg. Among the topics of discussion were Canada’s diminishing agricultural prospects. At its reception, one member described how he supplements the income from his Manitoba acreage’s wheat and cash crops with a small feed operation. But he added that his plans for expansion have stalled because he cannot get credit. Bankers have pointed out that farmland in his area has plummeted in value to $400 an acre from $800 in just three years. “They aren’t interested because of falling land values,” he said, “yet they’ll jump at the chance to give a mortgage to any yuppie couple in Toronto who want to get in over their heads and buy a $500,000 house.” Most of Canada’s 300,000 farmers limp along, buffeted by the triple whammy of land prices that are too low, high interest rates and low commodity prices. Canadian farmers go bankrupt at the rate of one per day. For at least 20 years, 30 per cent of Canadian farmers have worked at nonfarming activities to help supplement their farm income. But in the past 10 years, the amount of time they spend at nonfarming activities has increased by a dramatic 25 per cent. This trend is the inevitable final act in history’s most profound socioeconomic change—the abandonment of the agrarian way of life for an urbanized one. Most of our families experienced it. Many of our grandparents or parents left the farm and were replaced by tractors, milking machines or cheap imported food.

Of course, not each and every farmer fares poorly. A few millionaires mingled among the hundreds of agribusinessmen attending the Winnipeg convention. But they didn’t make their money working the land. They own farms within commuting distance of Toronto, or other cities, where condominiums, not corn, will grow one day. One Milton farmer said that he had just sold his 100-acre family homestead, located 40 km west of Toronto, for $3.6 million to developers. He and his brothers will retire.

Then there are those farmers who have prospered as a result of protectionist policies, including the creation of supply management boards, mini-cartels that control supply and artificially prop up prices for such commodities as chickens, turkeys, eggs and milk. Farmers in those exclusive clubs often find that their production quotas, which they can resell, are worth more than farmland.

Indeed, Canada’s farmers are divided both by income levels and by ideologies. There are two camps, those in favor of protectionism» and those against it. Generally speaking, grain, hog and cattle farmers have supported liberalized trade, including the Free Trade Agreement with the United States, because of their vested interest in breaking down protectionist barriers that shut out or threaten their exports. By contrast, supply management farmers fiercely opposed the FTA because it threatens their existence.

Ufider free trade, tariffs will disappear, but supply management boards for eggs, turkeys and chickens will receive protection by having U.S. imports remain at approximately current levels. A provision that applies only to fruits and vegetables will allow tariffs to be applied at the border to keep out a sudden flood of cheap

tomatoes or peaches or any other commodity.

Although Canada’s poultry and egg producers are protected, its milk producers face a serious test. When Canada tried to protect yogurt and ice cream processors by adding them to the Import Control List, the United States fought back by making a formal complaint under the General Agreement on Tariffs and Trade (GATT). Washington trade officials said that protecting milk supply boards was one thing, but dairy farmers could not also restrict ice cream or yogurt imports.

If GATT upholds the complaint over yogurt, milk supply management boards will unravel. That is because Canadian milk prices are higher due to import restrictions, but if restrictions do not also apply to yogurt, cheese or ice cream, imports of those products would easily undercut their Canadian rivals. Canadian ice cream makers will lose sales or force Canadian farmers to drop prices. Milk producers will no longer be able to dictate prices and get them.

GATT is also key to Canada’s grain farmers. Negotiators in that process are working toward ending the subsidy madness that has created a grain glut and low prices. In April, they were able to get the prime culprits, the European Community and the United States, to freeze subsidies at current levels. In 1988, subsidies paid out by the two tallied $60 billion for wheat and grain, nearly three times Canada’s entire farm revenue of $19 billion.

Indeed, maintaining grain exports has become the highest-stakes game in the world, and smaller producers, including Argentina, Canada and Australia, are finding it too expensive. To stay in, Canada awarded payments totalling $2.1 billion in 1987 and 1988, under the Special Canadian Grains Program, on top of $2-billion payments in both 1986 and 1987. Australia took another tack—its farmers are diversifying into sheep and wool.

Clearly, as the Manitoba farmer with his feed supply business has learned, diversification is the only route to survival. Even agricultural organizations are doing that. Two years ago, the Saskatchewan Wheat Pool cunningly bought a 25-per-cent stake in a chain of 133 doughnut shops in five provinces. As part of the deal, the chain, will buy all of its flour mixes from the pool.

Still others, including Delhi, Ont., tobacco farmer Palmira Murphy, have switched rather than fight or fold. She, and hundreds of others, were victims of Ottawa’s antismoking policies. Now, her barnyard has raceways filled with 125,000 rainbow trout, and she is beginning to market her harvest directly to restaurants and individuals for stocking ponds. She has also been using the fish manure as a substitute fertilizer, and plans to apply for a licence as a chemical-free farm in order to grow organic cattle feed. Meanwhile, other farmers are growing ginseng, novelty flowers or lentils. Said Murphy: “In 1982, my farm and tobacco quotas were worth $1 million. Now, they’re worth $300,000. It’s not fair—tobacco is still legal, and someone is growing it somewhere else. But you can’t remain in the past. We’ve made the switch now. We’ve gone from sin to health foods.”