Canada’s already financially battered farm sector “will face an extraordinarily difficult year, particularly those in the cattle and hog sectors,” the Canadian Federation of Agriculture has warned.
The forecast is based on income data compiled by Agriculture Canada and confirms what farm leaders across the country have been hearing from producers, says Laurent Pellerin, president of the Canadian Federation of Agriculture. The forecasts weren’t released by the department.
“The government’s own forecasts show deep losses for many commodities and highlight that the business risk management programs currently in place were not designed to function with today’s unique set of economic circumstances,” he added.
“While we appreciate the government’s commitment to fostering a long-term industry strategy, it’s very clear that farmers need additional support to get through the short term. The CFA has been advocating for this support and has presented government with several practical proposals to address the situation.”
However, Richard Phillips, executive director of the Grain Growers of Canada, said it remains to be seen what levels of payouts will be triggered from the income support programs this year. “Secondly, calling every year for short-term aid will never get us to solving the root problems.”
If the programs aren’t going to deliver significant payments, “we need to focus on key building blocks and removing key roadblocks,” he continued. “Issues like COOL and access to key export markets must be dealt with so our producers have the opportunity to be successful. We need the government to put more effort on those issues, especially for our beef and pork sectors as the domestic feed industry is one of our most valuable markets.”
The CFA release comes as the Commons agriculture committee works its way across the country hearing first hand what problems young farmers face getting into and staying in agriculture.
In detail, the forecasts released by CFA suggest that cattle and hog producers could see incomes drop by as much as 95 per cent because of lower prices and reduced herds.Netoperating income for the average cattle farm is forecast to be $10,889 in 2009, CFA said. That figure could drop to a loss of more than $5,000 this year.
“Net operating income for the average hog farm is forecast to be $45,558 in 2009, but will decline to $1,719 in 2010, below the 2004-08 average of $72,842,” Pellerin continued.
With such poor returns, farms are becoming more dependent on off-farm income to stay afloat. At the same time, farm debt continues to rise and is projected to be $83,173 per farm, an increase of 18 per cent relative to 2004-08.
“Input costs, for items such as fertilizer and pesticides, are also expected to increase over the next year,” he added.
“If Canadian farms are to stay competitive in a complex global market, governments must take action quickly and work closely in partnership with our industry on short-term measures to help farmers adapt to economic circumstances that are beyond their control,” Pellerin said. “Ensuring the viability of the sector now is crucial as we move toward developing long-term strategies for the food system in Canada.”
The figures are adding impetus to the CFA’s work on a national food strategy, outlined at the organization’s annual meeting earlier this year, he added.