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Agriculture in Canada's Economy

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Agriculture in Canada's Economy HEAD OFFICE: MONTREAL, NOVEMBER 1950 AGRICULTURE IN CANADA’S ECONOMY IARMINGis everyone’sbusiness, not only because than the simpleimplements of modernfarming. The F it furnishesour dailvfood but becauseit is shapingof the mouldboardof a ploughso as to give the base of so many industriesand so much of maximumefficiency with minimumeffort is a problem Canada’strade and commerce. of theutmost nicety. Agricultureis our mostimportant single industry. The Farmer’s Market It employsa quarterof ourgainfully occupied popula- tion. The economicwelfare of the whole nationis Justas agricultureis at thebase of allother prosper- affectedby changesin farm incomeand purchasing ity,so agriculturedepends upon all other industry for power. its stateof well-being.Only in an environmentot high level employment,abundant production~ and high Citypeople have quaint ideas about farm life. They purchasingpower can farmingbe a profitablepursuit. see a farmerliving in his own house,without rent to pay,growing a big partof his ownfood. He is freeto Becauseof limitationsin the homemarket, Canadian work as and when he pleases.He need never fear farmersare dependenton exporttrade. Any attempt unemployment. to keeptheir income at a highlevel requires main- tainingexports at 20 to 40 percent of theirproduction. Thesethings are true,but the impressionturns out Farmershave high interestnot only in the normal differentlyif we followa successfulfarmer around the functioningof the Canadianeconomy, but also in an clock.Success in farmingis theresult of clearthinking expandingworld economy,and thereforein world and skilfulmanagement, and a greatdeal of hardwork. peace. The man on the farm is the forcethat weldsland This introducesone of he most provocativeof and equipmentinto a producingunit. He planshis problems.It is easy to say "The more we buy from croprotations, attends to the fertilityof his soil, other countries,the more they can buy from us." balanceshis livestockprogramme with the feedavail- But what we sell them dependsupon the bargainswe able,controls expenses, uses labourand machinery offer.Our pricesmust be in linewith those available efficiently,andfinds his market. in the worldat large,and this compelsus to keep That is a complexbusiness. The changeswrought costsas low as possibleif we are to realizea satis- in farmingduring even one lifetimeare astounding. factorynet income. Today’sfarmer must be ableto use and maintainpower machinery,hire and superviselabour, obtain and Thereare many countrieswhere, if they had the managelarge amounts of capital,control expenses, purchasingpower, Canadian wheat and meat and attaina balancebetween all phasesof his farm’s fruitcould be usedto advantage.To developthem into business,and applyhis own physicalenergy as his marketsis the aim of sectionsof the UnitedNations, fathersdid. of PresidentTruman’s point four programme,and of thegifts and loansmade so munificentlyby Canada. Not allthis is to be learnedin books.Farming is an ancientoccupation. It has gatheredround it a vast Canada’s Farms fundof wisdomand skill,transmitted from father to son on the thinair of oraltradition or of livingex- Agriculturewas not Canada’sleading economic ample. We must not underestimatethe worth and activityuntil comparatively recent times. Vernon C. powerof thisbody of rurallore and technique. Fowke, AssociateProfessor of Economicsat the Universityof Saskatchewan,said in his bookentitled There are probablyno instrumentsknown to any CanadianAgricultural Policy, the HistoricalPattern: craftwhich are moreperfect in theiradaptation, with "Untilperhaps a hundredyears ago it was not agricul- morefine points upon which success or failuredepend. turalprospects which attracted newcomers to venture energiesand resourcesin the New World.... Agricul- and the numberof farmsreporting debt coveredby ture,it mightbe said,was not indigenousto Canada; mortgagesand agreementsof sale dropped from it was establishedand expandedonly under conditions 120,318to 66,846. of extremeand prolongeddifficulty." This,of course,reflects an easierfarm income Theprofitable and attractive opportunities in Canada period.The prosperityand well-beingof farmersdo wereof othersorts, generally commercial. But when not dependon agriculturehaving any givenpropor- thelast census was taken it showedthat 39 per centof tion of the nationalincome, but on achievingand Canadianmanufacturing plants were engaged in maintainingadequate income per worker. workingupon Canadianfarm products.In turn,the farmsof Canadarepresent a vastpotential market for It is impossibleto givea figurewhich will represent industrialproducts. Estimates based .on the census the net incomeof a farmer,because it varieswith indicatethat practically half the Canadianmarket for every communityand farm, and year by year. The productsof citymanufacture is providedby farmers. estimates,however, are interesting. Cash incomefrom the sale of farm products,the Where are these farms, and who own them? The most importantincome component,represents the followingtable, compiled at the timeof the census, grossreturns from all productssold off farms,valued tellsthe story: at pricesreceived by thefarmers. This figure reached an all-timehigh in 1948,and recededa triflein 1949 to $2,457million. As to how the incomewas madeup, hereare interestingdetails from the StatisticalSum- maryof the Bank of Canada. Mechanization The developmentof labour-savingmachinery has been a big featureof Canadianagriculture. Anyone Farm Finances lookingaround the averageCanadian farm todayis amazedwhen he thinksthat it was onlyin 1837that Goodfarmers have little difficulty, today, with their John Deeremade his firststeel plough from an old financing.Proper financing, both from the long-and saw blade.Canadian farmers certainly are notlike the short-termcredit standpoints, can meana greatdeal nativeson a South Americanestate who alloweda in successor failure,but sources of creditare plentiful. valuablesteel cart to rustin idlenessbecause it did Canadianchartered banks provide a largeshare of the short-termcredit used by farmers.Their local branch not squeaklike their old woodencarts. managersknow the financialand personalrating of At the half-waymark of the 20thcentury, a survey the localfarmers, and advancesare readilyarranged. of the technologicalchanges in farm life seemsto indicatethat farm peoplehave benefitted.The ef- In talkingof credit,it is wellto emphasizethe value fectshave not all beengood, but thelevels of living of a trueappraisal by the farmerof his needs,his for farm people have improvedmost in the areas abilityto repay,and the most economicalsource of wherethe greatestchanges have occurred. creditto meethis situation.Too easycredit should be avoidedif it meanstaking excessive risks, and the In 1901 the totalvalue of machineryon Canadian farmershould consult his banker,or someoneelse farmswas $108,665,502,an averageper farmof $213 equallyfamiliar with the broad agricultural picture as andper acre$1.71. In twentyyears the total had grown wellas withlocal conditions, before making decisions. to $665,180,416,the valueper farmhad increasedto $935,and the valueper acre was $4.72.In the ten Creditneeds to be used judiciously.Credit for yearsprior to 1948Canadian farmers spent more than productivepurposes is justifiedwhen after careful and $740 millionon machineryand equipment;in the one conservativecalculation the prospectivereturns from year,1948, they spent $237 per farm,on the average. the ventureamount to more than the cost. As was pointedout in the C.B.C.Summer Fallow programme, The transformationin Canada’s agriculture by these in a playentitled Country Banker, the Canadianbanks, successivechanges from hand power to horse power whileeager to advancecredit for farmexpansion and and then to machinepower goes far beyond mere development,are equallykeen to save farmersfrom laboursaving. It has alteredthe Canadianfarm from embarkingon expenditureswhich would end in grief a placewhere diversified production was pursuedfor for bothlender and borrower. home use to specializedproduction for the market. It shouldbe mentionedin thisregard that the census Efficientuse of machineryis of thegreatest impor- of 1946in the prairieprovinces showed 81 percentless tancein keepingdown costsand therebyincreasing indebtednesscovered by liensthan ten yearsbefore, profit.It is justas wastefulto useunnecessary machinery as it is to haveinadequate machinery. It is wasteful, All revenuefrom farmoperation is obtainedthrough too, when machineryis not properlyprotected from the mediumof cropsand livestock,and soil is the the weather.The costof protectionis discussedby basic resourcein their production.Income yield H. R. Hare,Agricultural Adviser, the NationalEm- dependsto a largeextent upon land beingused for ploymentService, in his bookFarm Business Manage- purposesfor which it is bestsuited. ment.Mr. Hareestimates that in the dampclimate of EasternCanada it will pay to spendas much as 20 Rough and stony land may break the heart and per centof the valueof the farmmachinery in con- exhaustthe bankaccount of the man who triesto till structinga building for its shelter, while in thedrier it for crops,but may returngood earnings when used atmosphereof the PrairieProvinces no more than for pastureor woodlots.Other land may produce 10 per cent of the machineryvalue should be so spindlyplants, or plantsdeficient in nutrientqualities, expended. becausethe mineralshave been exhausted by repeated croppingor by erosion.This land can be broughtback Family Farms to productivityby
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