Mr. Chair, ladies and gentlemen of the committee, thank you for giving us the opportunity to participate in the discussions as part of your study of business risk management programs in the Canadian agricultural sector.
My name is David Beauvais, and I am a dairy and maple syrup producer from the Estrie region, as well as the president of the Fédération de la relève agricole du Québec, or FRAC. I have been involved with the FRAC for 10 years and have served as its president since 2024.
I am speaking to you today on behalf of the FRAC, which brings together nearly 2,100 members aged 16 to 39 who are passionate about agriculture.
We believe that farm succession is the primary risk to be addressed in the Canadian agricultural sector and that it must be integrated into the administration of risk management programs.
This is all the more urgent given that $50 billion in agricultural and agri-food assets will be transferred in Canada over the next decade.
Among the factors hindering the smooth transfer of farms is the difficulty of accessing quality land at a price that allows for farm profitability. Land prices are 10 times higher than they were in 2000. In 2024 alone, the increase was 12.5%. The agronomic value of the land has not kept pace with the increase in market value.
Furthermore, Canada has a generational renewal rate of 24%, a sharp decline over the past several years. In 20 years, the number of young farmers has fallen alarmingly. These findings are all the more alarming as the consequences of climate change and the current geopolitical climate intensify. Risk management programs must take this situation into account.
It is therefore necessary to implement coherent policies and strengthen the effectiveness of programs, their responsiveness and their ability to mitigate risks for new-generation agricultural businesses.
In particular, we propose establishing patient capital as a solution given the risks threatening the next generation of farmers. This capital would be available to producers under the age of 40 who have been established for less than 10 years. It would offer financing of up to $1 million for the purchase of land, with a low, fixed interest rate over 40 years and a 5% down payment.
Among those who still dare to venture into farming, nearly half must hold a job off the farm to make ends meet, while trying to access land whose price continues to rise and does not reflect its agricultural value.
With this in mind, patient capital is a risk management tool that we encourage you to adopt. It is a long-term loan for projects requiring significant investment, such as a farming business.
In conclusion, the risks threatening the next generation of farmers go far beyond climate change and the geopolitical context. It is the conditions for establishing a farm and the renewal of transfers, among other factors, that constitute the risks facing the next generation. The long-term loan helps reduce uncertainty regarding financial fluctuations and constraints. It also allows for better planning of investments and repayments for the next generation.
Thank you for your attention, and I would be happy to answer your questions.