The mid-size farm category used to cover the majority of agricultural operations. These tended to be operated by a single farmer working on a full-time basis to support a single farm family. Now, a range of farm sizes exist, with small ones often being operated by farmers with off-farm employment, and larger ones being run by several farmers.

While mid-size farms used to be the average farm, it is now difficult to define what the average farm is. This has implications on determining the need for policy intervention and what that policy will look like. It’s clear the one-size-fits-all approach to policy-making no longer works.

The changes in farm size over the last two generations are illustrated in several ways. The first is through the decline in total number of farms in Canada. It has fallen by 44 per cent to 189,874 farms in 2021 from 338,552 farms in 1976.

Secondly, there was a significant decline in the number of mid-size farms. While the total has fallen, the decline is particularly evident among mid-size farms. In 1976, most farms were mid-size, but by 2021 that number had declined 59 per cent to 21,587.

Thirdly, there was an increase in the share of the smallest and largest farm size categories. The number of large farms increased to 16,966 in 2021 from 7,868 in 1976. The number of small farms has remained relatively constant at 12,000 since 1976, but this now represents seven per cent of the total, whereas it represented only four per cent in 1976.

Lastly, the shape of the distribution of farm size changed from a bell-shaped, normal distribution in 1976 to a flatter, more uniform shape in 2021. Farms are now spread more equally across the different size categories. It highlights the shift away from the average farmer being the typical one in the middle size category to farms more likely to be small or large.

The change in farm size distribution has several crucial implications. 

The first is that the largest farms represent an increasing share of overall food production in Canada.

While a surprising four per cent of farms have had no sales in 2021, 10 per cent of farms had sales over $1 million, and four per cent over $2 million, meaning 10 per cent of all farms now generate over two-thirds of the sales in Canada. 

The 70 per cent of farms with sales less than $250,000 represent less than 10 per cent of total revenue from the agricultural sector.

The increase in farm size and sales can largely be attributed to the technological advances over the last 45 years, which have allowed people to manage greater areas on their own. Canadian farms have had to evolve and modernize to keep up with the shifting agricultural landscape.

Farms now must operate in a highly competitive market with low margins, and as such have had to increase in both size and workforce to generate sufficient returns. Other farms have adjusted by selling food products at a premium to be able to exist on a smaller scale.

The changing size distribution of Canadian farms also has significant policy implications. There is no longer an average farmer that can be targeted with extension or business risk management programs. Instead, there is an increasingly large share of farms with distinct needs, and therefore distinct policy approaches are also required.

For example, if local goods and rural development are the policy objectives, then consideration of smaller farms is necessary for creating comprehensive agriculture policies. However, if sustainability and competitiveness of the sector are the policy objectives, then the focus needs to be on the larger farms managing the most land and generating the most output.

To maintain its farm size diversity, Canada needs a variety of policies to support small, medium and large farms. In particular, policy-makers should seek to support small and medium farms without discriminating against large farms, since they play a critical role in the Canadian food economy.

This is possible, but will require dialogue between the agriculture industry and the government to appropriately address the stratification.

This article originally appeared in The Conversation. 

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This difference is due to the high subset of Ontario dealerships that custom apply crop inputs on behalf of their clients, something which is not common among dealerships in the Prairies.

During the summer of 2019, the Department of Food, Agricultural and Resource Economics (FARE) at the University of Guelph sent out separate surveys to two groups: 1) members of the Ontario Agri Business Association (OABA) and 2) members of the Canadian Association of Agri Retailers (CAAR). The purpose was to determine the level of adoption for precision agriculture technology in crop production.

Rather than survey farmers directly, this survey interviewed input suppliers given the past success Purdue University has had through a long-standing survey with CropLife.

All crop input dealers in Ontario responding to the survey offer custom application services for the fertilizers and/or herbicides bought by farmers.

In contrast, only 47 per cent of respondents from the Prairies indicated that their retail outlet provides such services. The focus for most of the agri-retailers in the Prairies is on the actual sale of crop input products and the offering of agronomic advice rather than additional services.

Another indication of the relative importance of custom application between the two regions is the amount of area on which fertilizers and/or herbicides are applied by the agri-retailers for farmers rather than directly by the famers themselves.

Approximately half of the Ontario respondents custom apply agricultural inputs on more than 50,000 acres in a typical year, and this would represent close to half of the five million acres of corn and soybeans planted in Ontario.

Alberta, Saskatchewan, and Manitoba are three provinces that have significantly more farmland than Ontario, yet there were only six dealerships in all three provinces combined, who stated that they custom apply agricultural inputs on more than 50,000 acres in a typical year.

Additionally, a greater percentage of fertilizer and crop protection product sales are custom applied in Ontario compared to those Prairie dealerships who do offer custom application services. An average of 39 per cent of fertilizer and crop protection product sales are custom applied in Ontario, compared to 19 per cent in the Prairies.

When looking at the relationship between dealerships’ annual sales and the percentage of crop input sales custom applied a trend emerges. In Ontario, as dealership annual agronomic product sales increase, the percentage of crop input sales that are custom applied decreases.

An average of 43 per cent of fertilizer and crop protection product sales are custom applied by Ontario dealerships with annual sales of less than $10 million.

For dealerships with annual sales between $10 and $20 million the percentage of crop input sales custom applied is 40 per cent. It falls further to 35 per cent of sales for dealerships with annual sales of greater than $20 million.

For agri-retail locations in the Prairie provinces that offer custom application services, 22 per cent of fertilizer and crop protection product sales are custom applied by dealerships with annual sales of less than $10 million.

As annual sales increase to between $10 million-$20 million the percentage of crop input product sales custom applied falls to 16 per cent. Interestingly, the percentage of crop input sales custom applied then increases to 19 per cent for dealerships with sales of greater than $20 million.

The reason for this occurrence may be explained by mega dealerships offering more custom application services compared to medium to large-sized dealerships. Prairie dealerships with annual sales of over $75 million custom applied 25 per cent of crop input sales, compared to only 16 per cent and 11 per cent for dealerships with annual sales between $10 – $25 million and $25 – $50 million.

How agricultural input dealers operate differs significantly across Canada, especially in the context of custom application service offerings. Custom application services are an essential part of agricultural input dealers’ operations in Ontario but are not nearly as critical to the success of dealerships in the Prairie provinces.

This difference can be attributed to the relative sizes of both individual farms and agricultural input suppliers in these provinces and results in regional differences in precision agriculture technology adoption, as well.

This first appeared at foodfocusguelph.ca.

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