Good morning everyone, and thank you for travelling here. My name is Benoit Martin, and I'm a dairy producer established 30 minutes to the east of here, near La Pocatière. Jean-Philippe Deschênes-Gilbert, who is with me, is the Secretary of the Fédération de la relève agricole du Québec.
The Fédération de la relève agricole du Québec is a coalition of young people 16 to 35 years of age that has 1,500 members in Quebec. The main mission of our organization is to improve start-up conditions and to work to provide young people who will be setting up in agriculture with better preparation. We are affiliated with the Canadian Young Farmers Forum, and we had the opportunity to meet with you in Ottawa in February.
I will briefly outline the situation regarding the transfer of farms in Canada. Canada loses 10,000 farms a year, 28 a day. At this rate, there will be less than 100,000 farms left in 15 years. Assets have enormously increased in value in the businesses. In Canada, the average farm is worth $1 million. Business profitability is currently lacking, revenue has been poor for some years now, and indebtedness has obviously very much increased. People have tried to improve their profits by expanding their businesses, but they have also gone into debt in doing so. There are currently twice as many farmers over 55 years of age as are young farmers under 35. Young people move into other industries. A lot of young Quebeckers are going to work on the tar sands in the west. I imagine the situation is the same in other provinces. If nothing is done in the regions, there will be so few businesses left that young people will no longer be able to find a place to set up in farm businesses and will instead have to move into the major centres.
The first issue that we've identified is promoting the transfer of existing farms to a new generation. There are needs related to that, including assistance and support. Young people are entering the business, but others are leaving it. So we have to guarantee some financial security for the people who are going to retire. There must be better business development planning. Human relations are also a very important factor in the context of farm transfers; this is one aspect that must be singled out.
I'll give you a specific example of what's currently going on. One producer in my village has two children who work in Quebec City and who aren't interested in taking over his business. He'd like to transfer it, but he's having trouble doing that, for financial reasons. Since the young person to whom he'd like to transfer the business isn't from the farm itself, he's having trouble transferring it to him because, among other things, he's lacking the assistance and support, resources and financial security to retire. The producer, who wanted to transfer his farm, will probably be forced to sell it. That's one specific example of what's going on in my village.
There is a second issue. We at the Fédération de la relève agricole du Québec think that we have to enable new young people who aren't necessarily from the agricultural sector to enter the business. We have to enable them to enter the agricultural occupation. There are needs in this regard. The biggest need is for capital to be able to buy a farm, because it's currently difficult to gain access to capital. Assistance and support services are also necessary. There has to be access to technical knowledge. We also have to develop a mentoring service, to make use of producers who are retiring in assisting young people who want to start up a business.
There's one specific project in the Lower St. Lawrence region, which is the neighbouring region. It's a sponsorship project, a kind of business incubator. It seems to be working well, but there is one problem: these are young people who are interested in going into this incubator. Ultimately, these are abandoned farms that could be made available to young people, with whom we could match sponsors, mentors who could supervise them. This would work, but the young people who want to start up are really short of cash and don't have access to capital to buy these businesses.
We've identified potential solutions that we would like to submit to you. First, I think we should put young farmers at the centre of the renewal component. We've talked a lot about advisory services, but you also have to make your own farmers central to Canada's agricultural policy. Currently, very few aspects of the Agricultural Policy Framework deal with young farmers. As I said, we have to open up to a new generation of young people who don't come from the agricultural sector.
I think it's young people who could be dynamic and bring another vision. Agriculture and Agri-Food Canada's working paper says so in the following words:
Facilitating the entry of new producers will have major impact on competition and the long-term sustainability of Canadian agriculture.
Ultimately, all these young people who come from elsewhere and who have seen something else could bring new energy to agriculture. In France, the emphasis has really been placed on this. The President of Jeunes agriculteurs de France told us that it is young people who achieve the greatest success in agriculture because they have experience in other areas. They really built on this and it's working.
There are a number of provincial initiatives. In Quebec, there is the Fédération de la relève agricole du Québec, but there are also coalitions in Prince Edward Island, Manitoba and Nova Scotia. A number of other provinces currently have a kind of coalition. In Quebec, that has been around for longer, but we realize that, across Canada, there are really good leaders in all Canadian provinces. So we should rely much more on the coalitions of young people across Canada.
By way of a second solution, earlier I talked about access to capital for beginning farmers. It's all well and good to rely on the skills and knowledge of young producers, but if they don't have access to capital, they won't be able to start up in agriculture. In its working paper, Agriculture and Agri-Food Canada mentions that new businesses are facing special challenges in starting up their operations, particularly as regards financing and capital investment.
In agriculture, to be able to borrow $1 million, which currently corresponds to the average value of a farm, you have to have approximately $400,000 in cash. I don't know a lot of young people who are in that situation. The only people who can have that money are those who have a very rich uncle or a parent who has sold his woodlands, for example. Very rarely can a young person secure such a sum of money. So it is virtually unrealistic to think that a young person can borrow $1 million. But that's what you have to do now in order to start out in agriculture.
In our view, there is a solution to this problem. In Quebec, we call it patient capital. I don't really know what's it called in the other provinces, but patient capital is financing on conditions that are advantageous for the young people, including, for example, interest holidays in the first years and very low repayments. Not a lot of organizations are offering that in Canada right now. We should consider setting up a fund for that purpose.
An assistance and support role should be put in place for young beginning farmers. We were thinking of a federal assistance fund. It should be left to the provinces to manage the fund based on the needs of the young farmers. The assistance I was talking about could take the form of farm banks. We should establish a bank of names of people who want to leave the business and another of names of people who are interested in entering the business, to give them the opportunity to speak to each other. Currently, the only way to find out whether there are farms for sale is to flip through the pages of La Terre de chez nous. However, we also know that some young people are interested in entering the agricultural sector. So there's probably an opportunity to do networking among these people.
In closing, if I became Quebec's Minister of Agriculture tomorrow, I'd like to receive a budget envelope so that I could support the next generation of farmers. With that money, I would do some of the things I talked about earlier: farm banks, an assistance and support service, particularly for human relations, which are very important; a patient capital fund to support young farmers; a mentoring and sponsorship network; support for organizations that bring young farmers together, such as the Fédération de la relève agricole du Québec and Canadian Young Farmers Forum; the creation of technical and economic guides and files that could help direct young people to various types of establishments. With that, I think that, within 15 years, we could really reverse the downward trend in the number of farms. I think that's a realistic objective.