Hi. I'm Margo Staniforth. I'm here as a farm operator-owner and as a farm wife. We have a son who is 27 years old who is looking to come back to the farm.
I have put together a bunch of notes that I will read off to you so that I make my point, and I'll try to keep it brief.
I feel that to isolate this issue is nearly impossible without first having a clear picture of the total business environment that this industry is dealing with. Currently the percentage of farmers who are not encouraging youth to return to the farm is in the area of 70% to 75%. The average rate of return of youth to the farm is about 8%. This means that wherever 100 family farms manage the land and produce the grain or livestock, soon they will be replaced with only eight farms. With the current government concept, farms will just get bigger.
With these figures in mind, this is not only an unproven theory, but pretty much humanly impossible in most counties. This mentality will produce a large percentage of abandoned land. To maintain economic stability and development, land must be used for the purpose it was intended for. It is being reported that in light of the dry spring and the lack of feed, there are people abandoning their farms in northern Alberta right now. They have given up their farms, their livelihood, their investment in their farm operation and have simply walked away.
The average farm debt is seven times every net earned dollar on the farm. Approximately 2.4% of the Canadian population carries the same debt load as the other 97.6%. The reality that farm owners are willing to walk away and stick the bank with the land in bankruptcy should be a concern enough for government to work harder to improve the financial well-being of the farm producer population in Canada. If farmers all simply walked off their land right now in Canada, the big five banks would be finished in less than two weeks, and Canada would be financially ruined.
We have a doubled-ended problem here. Young farmers who want to obtain land to get into agriculture need to be balanced with those who are trying to exit from the industry. Retiring farmers have viewed their investment in their land as their retirement savings plan. However, most landowners I've spoken to tell me that no one in their community can afford to buy them out. It would make sense to offer zero-interest programs to young farmers or expanding farm producers as an incentive to buy out the retirees.
With land becoming more available through an aging farm population, there also need to be programs available to smaller farmers wanting the opportunity of expansion. As an example, if a 500-acre guy were to try to expand to 1,000 or 1,500 acres, it's quite likely that the banks would not back him up for higher input costs or more equipment, because he has had limited income in his financial track record. If a larger, more established farmer of, say, 5,000 acres decided to increase by the same 1,000 or 1,500 acres, chances are greater that the banks would work with him because of his higher income track record and greater asset base.
When the kids come back to the farm, you need increased revenue to support another household until the total financial takeover is complete, and that equates to a need for more land or more cattle or more infrastructure to accommodate that extra income. Farmers don't just grow food; we also grow farmers. Starting out in agriculture is often a multi-year, if not a multi-decade, commitment.
Without a financial program for retiring farm producers to take out their investment in their land, you're basically creating a whole new class of poor. Land rents reflect grain prices. Grain prices are, again, at a low. This leaves little option of moving off the home quarter to town, because it's cost-prohibitive. Combine that with the fact that many farm producers have not contributed maximum amounts to their retirement pension plans and you have a lot of older people who are forced to stay on the farm. Healthwise, this may or may not be working for them. Years of very low income levels on the farm as a result of poor agriculture support in Canada will become a taxpayer nightmare. We currently have a substantial number of baby boomers leaving the workforce, no longer paying taxes, who will not be contributing to the tax base to cover this off.
About 15% of the rural population creates 80% of the wealth in Alberta. This is a combination of energy in oil and gas and of agriculture, but as I have said, you can't eat oil. Creating more opportunities will help attract young farmers back to the land. There needs to be a focus on industry development—the ethanol biofuel technology, possibly. This is another government oxymoron. Legislation has been passed to include 5% of ethanol in gasoline; however, the plants to produce it have been slow in materializing. The end result will benefit U.S. farm producers, with imported ethanol to meet Canadian ethanol requirements. How is this building our economy? How is this benefiting Canadian farmers?
Further, we need legislation demanding that the legislated percentage of ethanol in our fuel is Canadian content only. There has been much discussion on the food versus the fuel equation. Every single time I attend a meeting where this topic comes up, I do a quick survey to find out how many people in attendance did not drive their car, and I have yet to find a bicycle rider at that meeting.
The reality is, people will not give up their vehicles, they cannot stop eating, and we need to balance both. We need the plants to support farm producers with a local crop marketing option. We need community income to rebuild communities. We need this industry to help attract young people to the farm.
We need a processing industry in beef and other proteins as well. The larger processors are squeezing the margin out of beef producers and then going broke themselves. We need to focus on local processing to service the ever-increasing demand for local beef, chicken, and pork. One report that I read on locally raised and locally slaughtered beef indicated a substantial price difference between the local option and the commodity marketing of cattle. Locally sold and processed produced $400 per head, while commodities produced $50 a head that with a shortage of water and feed quickly translated into a bill coming from the auction mart instead of a cheque.
Globally we have achieved the highest quality of food production, yet that does not equate to higher prices for farm producers. We are still losing farm producers at an alarming rate because the focus is not on building the agriculture industry, it is on selling farmers out to big business.
The equation is totally counterproductive to enticing youth to return to the farms since they must start smaller and assume huge responsibility over an existing operation, only to know that the odds and support are already working against them. Small operations are more geared to seasonal ag tourism businesses, which means still they have to hold down full-time jobs at the same time. Larger commodity-based operations are often still requiring at least one full-time income derived off the farm to keep their heads above water. Either way, neither option is possible as a full-time career.
We need to balance more on commodities in the World Trade Organization. The EU and the U.S. both enjoy subsidies that are prohibited to Canadian farm producers and we've never had a level playing field.
At the same time, these entities are demanding that the Canadian Wheat Board be wiped off the face of Canada. Obvious lack of government support in this area is a deal breaker and not a confidence builder. When we see a lack of proof that in Canada the CWB would benefit farmers and then take a look at the results of the deregulation of the Australian Wheat Board, which has resulted in substantial pricing loss to farmers, it creates a mistrust that the government is ever acting in our best interest.
Russia is now looking at starting their own wheat board fashioned after Canada's, to rebuild their lost agriculture industry that occurred largely due to government interference in the production of their food. The result was that they became net food importers. This is counterproductive to what the public is demanding in food sovereignty.
BSE had a huge negative impact on farm producers across Canada. Government has failed to take responsibility for the damages caused to farm producers. Farmers have had to launch a class action lawsuit and recently a petition demanding mediation to get issues resolved.
Bill C-474, fighting for farmer rights to have markets analyzed before big business and government dictate to us what we are allowed to grow and where we are allowed to sell it, and other bills legislated that take away our rights to our own land don't do much to attract youth to this industry.
We have lost our rights to our seeds. There is only corporately controlled research now. The Canadian Grain Commission is being broken down piece by piece. The CWB is under attack. We're currently losing our water rights in Alberta. We've lost our property rights to legislation over a fight with AltaLink. There is a new leaked document out there that says we are about to lose more rights to huge multinationals and that if we don't comply with their intellectual property rights they have the right to retaliate and freeze our bank accounts and prohibit us from doing business on our own land.
The WCB occupational health and safety now wants to control our every move in regard to staffing, to get their piece of our farms.
The margins at the store are getting exponentially larger. The margins on the farms are getting exponentially smaller.
So my question to the committee is, does this sound like a business you would want your kid entering?
Many contributing factors have led to the decline in agriculture in Canada, much of it due to government policy being overall ineffective. The results speak for themselves.
It should be a requirement that all government ministers, either provincial or federal, have a history of success in the portfolio they are assigned. In the private sector, it would not be done any other way. It has taken legislation to get agriculture into this mess, and it will take legislation to get agriculture out of this mess. We will not see youth attracted to the farms until that occurs. The successes in farming are substantial, tangible, and long term, and if they can compete with the successes available in other industries we may see more youth coming back to the farm.
There needs to be a complete switch in government mentality with regard to agriculture. Instead of focusing on ridding Canada of all family farms, there needs to be a focus on building them up. There needs to be a solid recognition of the contribution that agriculture makes to our overall economy, to rebuilding suffering rural communities, to fulfilling the demands for local food by your urban voters, the huge financial contribution to export markets, and the substantial economic ripple effect of food-related industry. Our family farms do feed the world, our family farms do support the Canadian economy, and we need a lot of changes to occur before the kids are going to be willing to come back to our farms.