Unit 8: The Canadian Agricultural Sector

(Lindsay Porter and Alfred Hecht)

To many people in the world the image of Canada is that of one large, golden-coloured, waving wheat field. In certain regions of western Canada this is true in the late summer. But the entire agricultural industry in Canada has been in constant change [1] and at present, only about 3% of the total population [2] is involved in agriculture, and this group is producing a declining share (2.2%) of Canada's GDP.

However, these figures are misleading when agriculture's total economic impact [3] within Canada is considered. Wheat exports contribute about 5% to Canada's total exports, which is about 70% of the total agricultural output [4]. Most of this is exported to the US, Japan, the EU and China. Subsequently, Canadian farmers are global in their thinking and planning because world markets can significantly influence their incomes [5].

As illustrated in the table, agricultural acreage varies across Canada. Saskatchewan has the largest acreage share at 39%, yet its total population is only about 1 million people. Saskatchewan is followed by Alberta (30%) and Manitoba (11%). Combined, Saskatchewan, Alberta and Manitoba have over 80% of all Canadian agricultural acreage. These provinces produce most of the grains grown in Canada. The major crops grown by rank order in 1996 were wheat, hay and fodder crops, barley and canola. Saskatchewan alone had approximately 60% of the wheat acreage.

Most of the Canadian export of grains is handled by a special Canadian institution called the Canadian Wheat Board (CWB) [7]. The goal of the CWB is to efficiently and effectively market all Canadian wheat with the help of economies of scale and professional traders. The wheat is collected by farm cooperatives at grain elevators [8] in most prairie towns and hamlets; a network of railroad connections ensures the grain is picked up and sent to transfer depots and ports. Much of the farm operation from the planting to the harvesting stage is supported by farm cooperatives [9], a unique Canadian feature when farm operations are compared to other countries.

Canada also produces a number of specialty products. Fruit such as peaches, plums and nectarines are grown mainly in southern Ontario and in the interior of British Columbia -- vineyards [10] and tobacco are also found here. Apples are grown here as well, but can also be found in the Annapolis Valley [11] in Nova Scotia and in the Eastern Townships [12] of Quebec.

The regional agricultural image changes somewhat when we look at the proportion of total farm receipts that each province has. The more diversified provinces of Alberta and Ontario are the major agricultural producers with 24% each of Canada's total. Livestock and poultry, which are raised in large, highly mechanised feed lots contribute substantially to their total agricultural income [13]. The remainder of Canada's farm income occurs in Quebec, Saskatchewan, Manitoba and British Columbia. Dairying is a major industry in Quebec and Ontario, and operates again under a special Canadian organisational feature -- a milk marketing board [14] -- which controls price and output.

Eastern Canada contributes approximately 1% of the total Canadian agricultural output. This is interesting considering eastern Canada was the first agricultural area to be settled and to export a substantial portion of their products. At the time of Confederation, eastern Canada had 20% of the country's farm lands (Troughton, 1982); in 1996 the figure was less than 2%. In total, more than 59% of the original farm land has been abandoned. The decline has occurred because of substantially better agricultural conditions in the rest of Canada. Substantial amounts of farm land has also been abandoned in Quebec and Ontario (roughly 25%), especially in the marginal areas of the Canadian Shield. Increased productivity and shrinking export markets have been the main reasons that these farms have been abandoned.

Similar to receipts, the number of farms in Canada is also higher in Ontario, Alberta, Saskatchewan, Quebec, Manitoba and British Columbia (see table). But the number of farms has been declining for a number of years as has the total employment on farms as a percentage of Canada's labour force. At the turn of the century, the majority of the population worked on farms, but by 1939 it had dropped to 31.5%, and to 3.5% by 1996. The declining trend is still continuing and the present percentage is envisioned to be halved again in the next 20 years.

Farm sizes also vary substantially within Canada (see table). In Saskatchewan, farms average 460 hectares, while in Newfoundland they are only 59 hectares. The variations in farm size across Canada are a function of the type of agriculture practised. For example, general grain farming is far more land intensive than vegetable production or even dairying, which tend to be more labour intensive. Larger farm sizes are possible because of increased productivity achieved with the help of better machinery and specialization.

As the numbers of individual farmers have declined, the percentage of income earned through farming has also declined. Of the 216,620 unincorporated farms in Canada in 1995 some 43% had no or negative farm incomes. Of the others, 21% received less than 1/4 of their total income from farming [15] and only 8% received more than 3/4 from farming. Other income often comes from another job or from government transfer and/or subsidy payments. This illustrates a trend towards part-time farming. Yet when one examines the proportion of farm operators, only 30% had a paid job off the farm. Most incorporated census farms, which make up about 20% of the total number of farms in Canada, tend to be more full-time operators.

It should also be noted that the average age of Canadian farmers was 48 years in 1996, which means that few young people are entering farming to ensure the future of Canada's agricultural sector.