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Cochrane District Agri Economic Impact

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Cochrane District Agri Economic Impact Cochrane District Agricultural Economic Impact Study October 2009 Cochrane District Federation of Agriculture Cochrane District Agricultural Economic Impact Study October 2009 Funded by: FedNor Ontario Ministry of Agriculture, Food and Rural Affairs Northwestern Ontario Development Network Cochrane District Federation of Agriculture Cochrane District Cattlemen’s Association Cochrane District Dairy Producers Cochrane Agricultural Society Matheson Agricultural Society Town of Cochrane Town of Val Rita Township of Moonbeam Township of Fauquier / Strickland Township of Black River Matheson Food Security Research Network Supported by: Ontario Federation of Agriculture Prepared by: Harry Cummings and Associates Inc. 96 Kathleen Street, Guelph Ontario. N1H 4Y3 Phone: (519) 823-1647 / Fax: (519) 821-0202 URL: www.hcaconsulting.ca Email: [email protected] This report is dedicated to Andy Dodds, Hedley Blackburn and Dave Hackett who have been longstanding members of the Cochrane District Soil and Crop Improvement Association since its inauguration in 1939. The report is also dedicated to Harry Kolomeitz who along with Dave Hackett contributed to the development of the potato sector in Cochrane District. ii Executive Summary The purpose of this report is to provide a profile of agriculture in Cochrane District and an estimate of the economic impact of agriculture on the wider economy. The study grows out of the need to clearly document and define the role of agriculture in the local economy and plan for the future. The report includes a description of the physical and human resources in the region, an overview of agricultural production in the District, and an estimate of the direct, indirect and induced economic impacts of agriculture in the regional economy. The research in this report relies on data from the Population and Agricultural Census (1996-2006), a survey of agricultural-related businesses in northern Ontario, and a focus group with primary producers and other agri-sector stakeholders from Cochrane District. The study was completed as part of a larger collaborative partnership between stakeholder groups in Cochrane District, Thunder Bay District, Rainy River District, and Kenora District. Separate reports were prepared for each of the four Districts. The focus of this report is on Cochrane District. The value of agricultural production in Cochrane District is substantial. In 2005, farmers in the District reported a total of $11.2 million in gross farm receipts. With respect to jobs, the local agriculture sector directly supports about 155 on-farm jobs. It is important to note that the above job figure does not include all part-time positions. Indeed, the employment profile of the agriculture sector is undergoing a transformation as part of a long term provincial trend with farmers increasingly working more hours off the farm to supplement their farm income. Between 1995 and 2005, the proportion of Cochrane District farmers working off the farm increased from 39% to 56%. Producers often link the need for a second income to a combination of factors including stagnant or shrinking commodity prices and rising production costs. The increase in off-farm work is also having a negative effect on the amount of time that farm leaders are able to volunteer for organizations and activities that have traditionally helped to promote agriculture in the region. It is also important to emphasize that the decline in agriculture employment does not reflect trends in farm productivity. Agriculture in Cochrane District continues to have competitive advantages and economic opportunities including a substantial farmland base that supports the growth of a variety of crops; lower land prices relative to land prices in southern Ontario, and its access to a regional market (northeastern Ontario). Cochrane District reported over 75,000 acres of farmland from 184 farms in 2006. With respect to crop production, the climate and soil conditions in the District allow for the production of a variety of field crops including barley, wheat, oats, mixed grains, and hay crops. Approximately 28,437 acres or 38% of the total farmland base in the District was used for crop production in 2006. Historically, Cochrane District reported as much as 187,000 acres of farmland in 1961 of which 54,161 acres were reported in crop iii production which indicates the District has significant potential for expanding agricultural production. Based on projections from climate change models, the growing season in the District is expected to gradually increase over the next 100 years which will result in further crop production opportunities for the region. Cochrane District features a variety of farm types and sizes. Major farm production activities in the District include hay/fodder production, beef production, dairy production, and a range of other animal production activities including horses, sheep, goats, bison, and deer/elk. The average farm size in Cochrane District is 409 acres but there is considerable variation in farm sizes across the area with farms in the Timmins area tending to be smaller (e.g. less than 200 acres). Additionally, farms in the Timmins area have become progressively smaller in size over the last 10 years while farms in other parts of the District have become progressively larger. Agriculture in Cochrane District has been greatly advanced and continues to benefit from research and other activities conducted by a number of northern Ontario institutions and organizations including the Kapuskasing Experimental Farm, the New Liskeard Agricultural Research Station, and various farmer led organizations. Another stakeholder group that plays an important role in supporting agriculture is the agri-related business community. These businesses represent a variety of industry sectors including retail and wholesale trade, manufacturing, construction, transportation and business services. Agri-related businesses provide the support infrastructure for the agriculture sector and through their linkages to farm based activities, generate substantial economic benefits for the region. A regional analysis of agri-related business activity in the combined areas of Thunder Bay District, Kenora District, Rainy River District and Cochrane District reveals that agriculture is making a significant contribution to the wider economy beyond the farm gate. Collectively, the 840 farms and the 270 agri-related businesses in this Study Area generate approximately $140 million in agri-related sales consisting of $62.1 million in direct sales (farm receipts) and $77.9 million in indirect sales (agri-related business sales). The associated sales expenditure multiplier indicates that for every dollar of farm income there is an additional $1.30 in business sales activity in the wider economy. Additionally, the agriculture sector in this Study Area supports between 2,520 and 3,465 jobs consisting of 1,120 direct jobs (on farm jobs), 455 indirect jobs (agri-related business jobs) and between 945 and 1,890 induced jobs (jobs in government sectors). The associated employment multiplier indicates that for every job in the agriculture sector an additional 1.3 to 2.1 jobs are supported in the wider economy. The high range job multiplier is more closely linked to the Thunder Bay region given the concentration of dairy and other agriculture sectors in the region and the larger agri-related business base. iv Recommendations As outlined above, agriculture in Cochrane District and northwestern Ontario as a whole produces significant economic and social benefits. The agriculture sector also features a number of opportunities for further growth and development. A common concern expressed by agri-sector stakeholders in northern Ontario is that government polices and programs are typically based on models of agri-food production that feature larger scale operations and southern Ontario market realities. More focus is needed on developing polices and programs that address the needs/challenges of farms operating in the more localized economies that characterize northern Ontario. For example, beef sector support programs in the Province of Quebec are often cited by local producers as important factors in maintaining a strong beef sector. Northern Ontario also has unique crop production challenges linked to soil and climate conditions and previous government land improvement programs were an important factor in the development of more productive farms in the District. Furthermore, historical data indicates that Cochrane District has a considerable farmland base that could potentially be brought back into production. 1. It is recommended that government officials work closely with agri- related stakeholders in northern Ontario to better understand local production and market realities in order to facilitate the development of more relevant and accessible polices and programs for the region. This includes the reintroduction of farmland improvement programs. 2. It is recommended the local/provincial government officials work closely with their Quebec counterparts to examine options for adapting and introducing relevant agricultural support programs from the Quebec context to northern Ontario. Value added farm activities are increasing in northern Ontario. A recent example is the proposed abattoir in the Town of Cochrane which is about to proceed with an environmental study on the site lands. This is coinciding with growing consumer interest in locally produced foods and local efforts to promote greater awareness
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