Ontario's farm economy - down but not out

Thursday, January 3, 2013

Once the province with the biggest agricultural base, Ontario now lags behind Alberta and Saskatchewan. But good prices and more stability could restore some of its strength

by BARRY WILSON


At one time – not that long ago really – one of the easiest ways to trigger an animated conversation with a Prairie farmer was to mention that Ontario actually was Canada's agricultural powerhouse.

It had by far the largest farm sales, net farm income and, because of its diversified agricultural base and local food processing industry, far less instability and dependence on taxpayer largesse than farmers on the Prairies. Southwest Ontario Liberal MP Jerry Pickard (Chatham-Kent-Essex) would brag that his riding had a bigger agricultural GDP than all but four Canadian provinces.

Although it was subsumed in Ontario's larger diversified and industrial economy, Ontario agriculture was Canada's poster girl for success, Canada's largest agricultural economy.

These days, at least for now, that is not the case. While still an agricultural powerhouse, Ontario's status as Number One has slipped away.

Statistics Canada reports that in 2011, although realized net farm income was up sharply from 2010, Ontario's farm economy was third in the country in profitability behind Saskatchewan and Quebec. Part of the issue was that Ontario farmers received less than 11 percent of program payments last year, well below Quebec, Manitoba, Saskatchewan and Alberta.

The trend continues. For the first nine months of 2012, the federal agency reported that, while Ontario farm cash receipts were a robust $8 billion, they were eclipsed by Saskatchewan and Alberta, making Ontario third again.

Despite AgriRecovery money from federal and provincial governments, year-end numbers likely won't change that course, given the drought that destroyed or diminished fruit, vegetable and forage crops from eastern Renfrew County along Lake Ontario, into southwest Ontario and then north through Haldimand, Oxford and Grey-Bruce counties.

Ontario farmers, once leading the pack, are in the middle and this year looking for government help. Meanwhile, in many areas local food processing plants have closed, reducing local markets for producers and affecting income.

What is going on? Has Ontario's agricultural sector really slipped to the middle of the pack among Canadian provinces? Ontario Federation of Agriculture president Mark Wales thinks not. The last two years don't tell the permanent story.

"I would think it is an anomaly," says the southwest Ontario vegetable producer.

Saskatchewan and Alberta are on a roll because their primary crops — grains, oilseeds and pulses — are doing well, harvests have been good and cattle prices have strengthened.

"This is an unusual time and I do think Ontario has the potential to be the largest agriculture province again," said Wales. "Prices are great for some crops and it really depends on how long those prices remain. It bodes well for all provinces in the long run if we could just get some stability in production. Weather has been erratic."

At the George Morris Centre in Guelph, executive director Bob Seguin says the Ontario farm economy remains strong but, in an era of record grain and oilseed prices, the province does not have the acreage to cash in by expanding production.

He also noted some changes in some of Ontario's traditional strengths. "For example, the cattle sector is not as strong as it used to be and there are some production changes as markets change," he said. "The question is whether there are fundamental structural changes happening that we haven't picked up yet."

Whatever the answer is to that question, it is not so easy now to rile Saskatchewan farmers by reminding them that their province really is only number two. These days, by a country mile, they're number one. BF

Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.