The Cost of Doing Business in Agriculture

By Mark Wales, President, Ontario Federation of Agriculture

-August 24th, 2012

Some Ontario farmers, like their colleagues across parts of North America, are bracing for meagre returns on their investment this growing season. Crops have dried up and failed to mature in many parts of the province. Drought has destroyed early spring’s promise of a good year, and farmers will begin the struggle to cover their losses.

The provincial government is expected to step in to provide emergency financial relief to help the hardest-hit farmers make it through the winter and into the next growing season. When that happens, some Ontarians will inevitably raise questions about what makes farmers different from any other Canadian business that falls on hard times.

The question is a fair one. Many business people experience financial hardship. Failure is often the result of being in the wrong place at the wrong time, and not necessarily due to a business owner’s poor business acumen. Every business person assumes a certain amount of risk by investing in the training, overhead, supplies and relationships required to be successful – it’s the cost of doing business. What’s so different about farmers?

Simply put, farming is not like other businesses. Farmers’ strongest resource – the natural world – is also their biggest liability. And the end product, essential food to sustain us all, is too vital to lose. Finding the right window of time, in Canada’s temperate climate, to plant and harvest thousands of dollars worth of seed in open fields is just the beginning. Add to that the potential for weather or disease-related harm or destruction to enter the farm, the unpredictable costs of managing them and the risk of losing an entire year’s inventory. And in farming, prices are determined on world markets, usually through the Chicago Board of Trade. Farmers are too often price takers, not price makers.

Ontario farmers prefer to get their money from the marketplace. They work hard to overcome the challenges encountered on the farm. Farmers here are well regarded for their early adoption of new farm technologies that allow for less waste, higher production and better environmental benefits for the farm. They’re diversifying and differentiating to remain competitive despite world markets and the vagaries of the weather. And, they represent an important primary industry: they grow food.

Farmers are not regular business people. They are highly specialized food producers who are subject to a tangle of factors, many that will never be in their control. Farmers will always seek an income from the marketplace first – and only look to government to ensure they’re not shouldering the high risks of Canadian food production alone.

For more information contact:
Mark Wales
Ontario Federation of Agriculture

Neil Currie
General Manager
Ontario Federation of Agriculture

Comments are closed.