Good morning, all. I find this a little bit unnerving, as I've never appeared before a standing committee before, and to be the first presenter is interesting.
I'm here representing the National Farmers Union Youth, and certainly I am not a young farmer. I've been involved in the business for a number of years. Ours is a century farm, settled by my grandfather and great-grandfather in 1908. The report that I'm about to give to you has been prepared by the young farmer wing of our organization. And interestingly enough, the age at which the NFU considers young farmers to be was changed this past year and now we consider young farmers right up to the age of 35.
It's no secret that Canada is losing farmers at an alarming rate, especially those who are younger than 35. Statistics Canada information shows a 62% drop in young farmers over the course of 15 years and a consequential rise in the average age of farmers. We can see that clearly farmers in Canada are getting older and that there are very few young farmers choosing farming as a career. I think overall, if we were to look at the statistics, we would see that between 8% and 9% of farmers in Canada are younger than 35 years. Probably about 40% of them are above 55 years of age and the remainder are in the age group of 35 to 54 years, so clearly there's a big shift coming.
The potential negative effects of this continual shift were recognized decades ago, and it's only recently that a major effort has been made from many sides of the industry seeking solutions. The demographic changes can be attributed to many factors, such as market fluctuations, more efficient production methods, improved technology, and more career options for young people to choose from.
The current statistics on young farmers show that something more dramatic has happened in agriculture to cause this decline. Potential new farming entrants have lost the support mechanisms that reassure them that they will be able to earn a living from farming. Most farmers start out their career as small farmers and then grow larger for various reasons. The mechanisms that small farmers use to get started are basically the same ones that new farmers will use when they start farming. However, these mechanisms have been depleted over the years, and as small farmers lose their ability to earn a living and new farmers no longer have the security they need to begin their career, the result is fewer and larger farms as well as fewer and fewer entrants into farming.
Some examples of these support mechanisms for small farmers are supply-managed production systems, so they can actually see that there's going to be a profit at the end of the day; collective marketing strategies; ability to save and reuse seed; producer car-loading sites; and local accessible infrastructure to assist in the first stages of processing and marketing our farm products. These systems clearly benefit small producers, but they are threatened today, and sometimes by the voices that are searching for ways to regenerate interest in agriculture among our young people. It's interesting, from a western perspective, because what we see in farms is not necessarily what we see across Canada. There are many smaller successful farms in eastern Canada. A lot of them are involved around direct marketing of their own produce, vegetable gardens and so forth, and these people are actually making money farming.
There are actually three areas of agriculture policy that have an effect on beginning farmers, and I would like to call your attention to ones that we think are very important. The first one is financing and insurance. Farm debt has skyrocketed to an estimated $62 billion. It's increasing at the rate of $2.5 billion a year. Unchecked, it will double again by late 2020s or 2030s, so the increase is rapid, and it's relentless. Basically, it starts in about 1994, and that's when we started to see the growth in farm size.
Have I only two more minutes? Okay, I'll run through this really quickly then.
Basically, what has happened is that as farms have become larger and larger, debt has correspondingly increased. Another thing that's alarming is the amount of debt that's carried per dollar of a realized net farm income.
We all understand that you need debt in order to run any type of business, but the increase in debt in the Canadian farm population is alarming. Young farmers are going to need access to land and intergenerational transfer. Many beginning farmers find themselves unable to provide the necessary security that banks require to borrow the sums needed for purchasing land. If and when they are able to secure the funds to purchase property, the debt load on new farmers is enormous.
The NFU Youth makes the following recommendations: a land bank system of tenure guaranteeing a fair price to the seller while offering new farmers affordable conditions of purchase; intra-generational transfer programs that facilitate the movement of land and capital and minimize the cost in tax burdens on both generations; and a limit on land speculation, foreign ownership of land, plus research support promotion of alternatives to land ownership, such as cooperatives, could be solutions for new farmers.
Also in regard to federal programs, business risk management plays an extremely important role in Canadian agriculture, and with increased instability in markets and climate producers rely on federal program support programs to mitigate risk. The recent transition in a few provinces of agricultural stability crop insurance offices demonstrates practical moves to create a more accessible producer-focused approach to this assistance.
The NFU also makes the following recommendations: lower caps on federal support programs to $500,000 to ensure more support gets to the most vulnerable farmers; maintenance and strengthening of farmer-led supply management and orderly marketing systems to provide stability for new farmers; simplified federal support programs for young and new farmers to make them accessible without hiring a professional accountant; and regionally administered programs to support new entrants advertised effectively in local rural areas.
In conclusion, I'd like to say that in recent decades agricultural policies in Canada and similarly throughout the world have deliberately and systematically removed mechanisms of protection for farmers. This has resulted in fierce global competition in the marketplace. A lack of resolve on the part of governments to control consolidation in the industries that not only supply farmers with their inputs but also purchase their goods has resulted in farmers dealing with corporations that are so large and without competition that farmers cannot earn a decent living in Canada.
Whether this movement has taken place in the name of economics, agri-food science and technology, or increased production and efficiency, it has clearly neglected some of the most important requirements for long-term sustainability of the sector. Strengthening the systems that create stability and increase market power for individual farmers in Canada will result in renewed interest. For the just under 30,000 young farmers in Canada today and the fastest declining numbers in history, we simply cannot afford to continue along this path. A policy direction that focuses on valuing small producers is the only option for long-term renewal in agriculture.