Prairie agriculture at a crossroads
June 26, 2009
University of Manitoba economist Dr. Greg Mason maintains that global competition and farm succession are the two most pressing issues facing Canadian and Prairie agriculture in the second of a three-part series.
June 26, 2009 By Troy Media/University of Manitoba
June 24, 2009
Dr. Greg Mason, University of Manitoba
Canadian and Prairie agriculture face major challenges in two areas: realignment of global competition and succession.
For many years, economists promoted free trade as an obvious measure for increasing the income and wealth of trading nations. However, the recent collapse of the Doha Development Round of World Trade Organization negotiations reflects the complexity of managing international trade and shows that access to international markets is never assured. As the bovine spongiform encephalopathy (BSE) crisis illustrates, without access to international markets, Canadian agriculture fails.
Equally challenging for the prairie farmer is the rise of agricultural suppliers elsewhere in the world. Australia, Brazil and Argentina have all emerged in the last decade as serious agricultural competitors.
Formidable competition is bound to emerge elsewhere, such as the rapid growth of grain production in the Ukraine, the former breadbasket of the world.
It can be difficult to find opportunities within these global trade challenges. However, the continuing subsidization of agriculture by the United States and European Union is not sustainable. The current financial crisis and budget deficit in the US has increased pressure on Congress to jettison expensive farm supports, especially as food prices continue to rise and farmers do well. The US taxpayer is becoming increasingly restless with the bailouts. In addition, the strategy of growing high quality hard wheat (suitable to pastas) has been Canada’s marketing edge. Coupled with a focus on food safety and quality, the positioning of Canadian food as safe and high quality is critically important to support the global marketing of our products.
Farm succession is also approaching a crisis point. In 10 to 15 years, with 40 percent of Prairie farmers over the age of 55, the number of operators and owners will plummet, with no assurance of sufficient replacement, even with the number of enterprises falling. To avoid inevitable “fire sales” where large agribusinesses consolidate farms into huge enterprises, we need a plan.