Is the Family Still on the Farm?

Sunday, October 16, 2022

The number of farms has decreased only slightly across Canada

By Becky Dumais

Farms come in all sizes and varieties, but are family-owned and operated farms disappearing?

Producers have mixed opinions on the subject. Reasons for believing that family farms are threatened or declining include barriers to accessing land, finances - or not having a succession plan.

Although conclusive data hasn't been released on just how many of Canada's farms are still owned by families, Statistics Canada's 2016 Census of Agriculture reported that 97 per cent of Canada's farms were in fact owned by families.

Jessica Pfisterer counts herself and her husband lucky to own a farm, "because we, as first-generation farmers, were able to purchase a farm before the market went crazy and have the opportunity now to create that family farm for our son and future generations."

She says producers struggle with being able to make enough money from the farm to sustain it. A serious threat to family operations.

"I think that, unfortunately, family farms are being sold off for a variety of reasons, whether it's that the kids just don't want to take it over from the parents, or they understand they'll have to work the farm and an off-farm job," says the Kenilworth, Ontario mixed farmer.

Changing farms & transition

In 2021, the Census of Agriculture counted 189,874 farms, a slight decrease of 1.9 per cent from 2016. According to the Census, farms in Canada reported a 3.2 per cent decrease in total farm area from five years earlier.

The total number of farms reported in Alberta was 40,638 in 2016 and 41,505 in 2021. Saskatchewan's number was 34,523 in 2016 versus 34,128 in 2021. Manitoba reported 14,791 in 2016 and 14,543 in 2021. Ontario was 49,600 in 2016 and 48,346 in 2021.

Plans to pass down the family farm are increasingly important.

National Census data indicated that more farmers are making plans to transition their farms to the next generation - 12 per cent of producers have a succession plan compared to only 8.4 per cent in 2016.

"For the most part, we see farms transitioning to the next generation within the farming family, but non-family transition is becoming more and more common as sometimes the younger generation within a family isn't interested in farming, but those outside of the family are interested in farming and looking for opportunities to own and operate their own farms," says Heather Watson, executive director of Farm Management Canada.

Doyle Wiebe, who farms northwest of Saskatoon in Langham, Sask., has two sons. Though they won't be taking over the farm, there's the possibility that his joint-venture business partner's children will.

"I can very much understand why they weren't showing interest," he says about his sons. It was partly due to the nature of their personalities - but also likely because of their limited on-farm experience as children.

"They were not that involved when they were young boys. I was often away from the farm doing other business I was involved with, so I couldn't expect my farmhand to have them ride the tractor with him.

"Things like that didn't get them to have the same impressions of what farming is about when they were very young, but they were able to see in another way what business is about in different ways."

"I did hear a quote," says Pfisterer. "I was told, 'there's a special place in hell for someone who sells the family farm' - and that will be instilled in our children that we have," she laughs.

"I think from a parent's perspective there's a disappointment - you put your blood, sweat and tears, and every penny you have, into the farm, and to not see it be continued on by your family - I'm sure there's disappointment there."

Misconceptions of ownership

Just because a farm is classified as something other than family-owned doesn't mean it's not family owned.

"I'm sure when someone comes to your door with a big, fat cheque it's hard to turn down," says Pfisterer. We've heard lots of stories that people put in offers on farms and someone - either a foreign buyer or a corporation - makes an offer way above.

"They're just totally priced out of the market."

Wiebe doesn't believe there has been much of a change in who actually owns and farms the land.

"The fact that I'm incorporated - some people might think that's some kind of a non-family thing, but there are various business purposes to create that entity 25 years ago. Cargill is a family business too. But you think of it as more a corporate, multi-national rather than a family.

"So, us hanging our hats on just saying family farms are some kind of special virtue isn't necessarily the case either - I understand that. But the fact that there are some deep pockets coming into agriculture, investing in land - some of the deep pockets are just owning land and using the revenue from it, leasing it to farmers."

Watson says that the family-owned versus corporation-owned farm is all about perception.

"Corporations are simply businesses who have decided to incorporate - it's a business structure term," she says. "More and more family farms are incorporating as it makes business sense in many cases from a tax perspective and to help with the transition of the farm from one generation of owners and operators to the next.

"A corporate farm doesn't mean it's no longer a family farm."

Many corporate farms are family-owned and operated - it's simply a business term describing the business structure.

"However, there are companies out there seeking to purchase agricultural land from farmers to rent back to farmers and provide opportunities for new farmers," says Watson. "They have a desire to keep the land in farming, and alleviate the financial challenges of farm ownership, especially for new generations of farmers."

The Pfisterers chose a partnership solely based on cost.

"If we wanted to incorporate - we spoke to our accountant and she recommended we stay as a partnership because the overhead costs wouldn't benefit us with the benefits of being incorporated," she says.

"We're just not there yet from a farming income perspective."

In Watson's opinion, how producers choose to operate or classify their farm comes down to a business decision "and there are trade-offs between various ownership structures - from sole proprietorships to partnerships and incorporation."

Barriers to ability

Accessing land is a barrier to farming for some Canadians.

Whether a farming family owns their land, rents it, or a mix of both, it doesn't preclude them from being a legitimate operation. "I've always rented land. It wasn't like I wasn't a bona fide farmer if I didn't own my land," says Wiebe.

"If I have access - access is the ticket to production, and as long as you have a decent rental arrangement where there is a margin left, then I can do business."

As a first-generation producer just starting a family, Pfisterer says there isn't a shortage of young people willing to do the tilling.

"The problem is land access.

"Not only availability and access to capital to purchase land, but there also isn't a lot available in southern Ontario, and the problem is, when people go off-farm to work at jobs, no one's moving up to North Bay to start a farm when everyone's down south where the main market is."

To help others get into farming, they recently opened an acre of their farmland as a land access opportunity to a family from Guelph.

"We understand that land access is the biggest barrier, so we're trying to do our part.

"We're not charging them for it, and they're going to try and start their farming journey. People have to start somewhere," she says.

There are still many young families across Canada looking to farm, just like the Pfisterers.

"They just need the right opportunity. There's a whole paradox there of people wanting land, and land not being easily accessible for them." BF