Research suggests mid-sized farms have harder time competing


Since the 40s, the number of farms in Canada are fewer and larger, a trend that holds every census. But digging in to a layer below that, are all farms getting a bit bigger year-over-year, or what does that dynamic look like? Plus, what factors are driving that average?

Al Mussell, research lead at Agri-Food Economic Systems is the author of a recent policy concepts paper, titled “Collapsing Middle of the Canadian Farm Demographic: What are the Implications?”

“The data really suggests to us that what’s going on here is the growth in the number and size of farms is in the already large and very large category, with decline centred in the small farms, but especially in the middle sized farms, those in the range of $100,000 to $500,000 in farm cash receipts,” says Mussell.

As Mussell explains, the mid-sized producer is having a tougher and tougher time accessing land, being viable, and competing with the larger operators who are in the position to buy land, and can set the price.

One of the challenges for agriculture is that farms are viewed as extensions of households, a holdover from how Canada was settled through immigration. This extension or link to household (and off-farm income) can complicate policy design. For example, taxation of farms is based on residences with a rebate back on some portion of the land. Put another way, if you have a construction business, there’s no statistics on your off-construction income.

The result is that when there’s growth in the large farm segment, the tie between household and farm erodes away.

“When it’s not perceived that way then a lot of the assumptions that you make on how you can do business in agriculture — regulations on transportation, labour, environment, etc. — agriculture’s treated as a special case in terms of all of those because it’s a special case, and if it’s not tied to a household, then why treat it differently,” says Mussell.

Mussell suggests that penalizing larger farms isn’t the way through this issue, but instead collaborating. He points to work done by Mark Brock in his Nuffield research for what that might look like.

Listen to the whole conversation between Mussell and Kara Oosterhuis below to hear more about the research:

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