Socio-Economic Factors Related to the Arda

_SOCIO-ECONOMIC FACTORS RELATED TO THE A.R.D.A. PROGRAMME FOR LAND CONSOLIDATION AND FARM ENLARGEMENT IN EASTERN ONTARIO

Bruce E. Zimmer and R. Stephen Rodd SCHOOL OF AGRICULTURAL ECONOMICS AND EXTENSION EDUCATIONj_ In Co-operation With CENTRE FOR RESOURCES DEVELOPMENT University of Ly_t_ielph

July 1971. Publication AE 71/7 CRD No. -16

ERRATA

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1 This report is about the A:R.D.A. Farm Enlarge- memt and Consolidation programme for Ontario farmers. This programme was initiated in 1966 in Easterr. Ontario to help low income farmer's achieve better adjustment of people and the land resource. Since 1966, the programme has been expanded into other parts of Ontario. The field investigation reported here was carried out in 1966 and the analysis pr- formed during 1966-1968. There have not been any major changes in the programme which would appear to affect seriously the findings and interpretations presented here. The study examined two typical geographic areas of Eastern Ontario but its findings cannot be applied to Other regions without further information and judgement.

It is impossible to ignore the intricate ccm- plexities of the human, social, and resource scene in which A.R.D.A. attempts to reduce farm poverty. This complexity is perhaps the key conclusion from the study; the limitations of the programmes arise from the difficulty of "fitting programme to problem". Rural poverty is the result of "circular and emula- tive causation" which links symptom and cause into a double-knit fabric which resists our attempts to unravel it. The story reported here ends with some of the mood of a Greek tragedy: past events and inherited conditions appear to doom us today to frustrated failure or, at best, only limited success.

1 The authors are, respectively; Commonwealth Scholar, Department of Geography, University of Queensland; and Associate Professor, University of Guelph. For an expanded account of the research on which this report is based see Bruce E, Zimmer, Socio-Economic Variables Affecting A.R.D.A. Proposals for Eastern Ontario Farms, unpublished M.Sc. thesis, University of Guelph, 1968.

ii This report is the result of an unusually rich degree of co-operation among disciplines, among parts of the University and between the University and the Canada Department of Agriculture and the Ontario Department of Agriculture and Food. The research originated in the Department of Agricultural Economics in Guelph. The field work phase was financed and greatly assisted by the Canada Depart- ment of Agriculture, Economics Branch, and gratitude is expressed to Dr. Mel Andal and Mr. Ralph Stutt. There is a strong interdisciplinary involvement in the project, with each author combining different specializations. The prime author, Bruce E. Zimmer, contributed the skills of a geographer; these were blended with economics and the perspectives of resources development. Many contributions were made from other areas, including statistics, by persons too numerous to mention individually. The contributions of Dr. Helen Abell, formerly Department of Extension Education, and Professor Douglas Hoffman, Department of Soil Science, are gratefully acknowledged.

The study was related to the inter-disciplinary programme of the University's Centre for Resources Development, and was the responsibility of the Department of Agricultural Economics. Certain aspects of the research were part of the research programme of the Ontario Department of Agriculture and Food conducted by University of Guelph, and this financial support is also gratefully acknowledged.

Any local case study bears some limitations in applicability to other areas. Nevertheless, the authors believe that this study has great relevance in general to other parts of Ontario and Canada. First, it touches on many parts of rural development, including the characteristics of the men and women who live in poor areas, and the relevance to them of plans for adult education, education planning, community structure, resource adjustment, and

lii population migration. The Pre-Cambrian Shield and the Limestone Plain are typical land forms and resources for many regions. Most important, tile programmes examined here have been renewed and expanded in the A.R.D.A. 1970-1975 Federal-Provincial Rural Development Agreement involving the Federal Department of Regional Economic Expansion and Ontario Department of Agriculture and Food. Further, this report reflects an analytical approach which is necessary in an increasingly frequent kind of problem situation, in which there are complex claims of interacting characteristics, behaviours, and responses.

The names of the A.R.D.A. programme have been clarified since 1966. Initially it was known as the Farm Enlargement and Consolidation Programme as described in this report, and in which a farmer might participate either by selling his land to A.R.D.A. or by leasing land from A.R.D.A. to enlarge hi:; operation. Currently these two main aspects have been given separate titles: (a) The Land Consolidation and Adjustment Programme, in which farmers may sell their land to A.R,D.A., and (b) The Farm Enlargement Pro- gramme, in which eligible farmers may lease additional land from A.R.D.A. to form a viable unit. A.R.D.A. also conducts related programmes in Retraining and Rehabilitation, Resource Development, and in Alterna- tive Income and Employment Opportunities.

Both the social scientist and the rural leader will find much to consider in this analysis. The technique and the content of the research were new; innovation was required to meet the challenge of a new kind of resource development question. Section III (1) will be of interest to the scientist concerned with metho- dology and with the model of the factors affecting farmers' participation. Sections II and IV, will be of greatest interest to those responsible for leading and carrying out rural adjustment programmes. Here is portrayed the multi-faceted inter-connected set of rural adjustment conditions, attitudes, and desires. The constraints on successful adjustment are summarized in Section V. The nature of the constraints are epitomized by the finding that even the suggestion of early retirement and a guaranteed life-time income appealed to very few farmers in the area studied.. It would appear difficult to encourage farm labour to go to other occupations or to stop working on their farms and it appears unlikely that many "economic farms" can be established under current programmes in areas such as Eastern Ontario. The prediction in the final pages that there would be greater success in south-western Ontario has been borne out by experience in Bruce and Grey counties in the months since the report was prepared.

•••• SUMMARY

Through the use of questionnaire data, an attempt was made to provide some preliminary estimate of the probable extent of successful participation in the A.R.D.A. farm enlargement and consolidation programme for Eastern Ontario. A statistical analysis of questionnaire data included the testing of hypothesized relationships between selected socio- economic factors and interest in participation either by enlarging or by selling the farm. The resuLts of this testing were then combined with data on the socio-economic circumstances of respondents and their attitudes toward, and interest in, the A.R-D.A programme, to define those most likely to participate successfully, and to provide some estimate of their numbers. For the questionnaire survey, farmers were sampled from two townships selected as representative of the low income farming areas of the Precambrian Shield and the Limestone Plain - these being physiographic land types of low agricultural capabil:_ty within Eastern Ontario.

On the basis of the survey results for the two townships studied, the following were inferred; (1) factors significantly related to interest in • A.R.D.A. farm enlargement include level of gross farm sales, age of farmer, his management ability, presence of plans for farm improvements, a belief that this could increase income, awareness of A.R.D.A-, and attitude toward A.R.D.A.

(2) factors significantly related to interest in selling for A.R.D.A. farm consolidation include location on the Precambrian Shield land type type of farm, farm market value, absence of a son to continue operation of the farm, low management ability and effort at farm improvement, absence of plans for farm improvement;

•• despite a favourable reception among respondents (nearly all agreed with the programme in principle) and a modest interest in participation, the suitability of the A.R.D.A- programme for the study area may be more apparent than real;

(4) j.t appears that (a) for the Precambrian Shield area, only between five and fifteen percent of respondents will be likely to benefit from A.R.D.A. participation - the constraint being the scarcity of those interested in enlarging and capable of succeeding, (b) for the Limestone Plain area, only between ten and twenty-five percent of respondents will be likely to benefit from participation - the constraint being the scarcity of those interested in selling for farm consolidation and likely to benefit from vocational training;

(5) in both areas, a combination of socio-economic circumstances, a scarcity of young and progressive farmers, a generally low managerial ability among farmers, the low agricultural capability of most farmland, and only moderate interest among likely participants, combine to suggest a law potential for successful farm enlargement;

) as a result, some alternatives to the current approach should be seriously considered - in particular a more comprehensive rural development scheme. _

vii CONTENTS Page. PREFACE SUMMARY

I. INTRODUCTION 1. Background to the study 2. Scope and Objectives 3. Study area and method

II. FIRST STAGE DATA PRESENTATION 6 1. The farm situation in the study 6 area - 2. Awareness, attitudes and interest 14 in A.R.D.A. (i) Awareness 14 (ii) Attitude 15 (iii) Interest 17 (a) Enlarging 1€ (b) Selling 18 (iv) Alternative land use lc (v) A more comprehensive rural 21 rehabilitation programme

III. FIRST STAGE DATA ANALYSIS 22 1. The Statistical Analysis 22 (i) the nature of hypotheses 22 tested (ii) the method of testing, and 21. data processing

2. Results of statistical testing 26 (i) Factors related to interest in 26 ENLARGING under A.R.D.A. (ii) Factors related to interest in 31 SELLING under A.R.D.A.

viii IV. SECOND STAGE DATA ANALYSIS: LIKELI- 35 HOOD OF A.R.D.A. SUCCESSS IN THE STUDY AREA

1, Introduction 35 2. Enlarging 36 (i) Defining those most likely to 36 enlarge successfully under A.R.D.A. (ii) Estimate of those most likely 39 to enlarge successfully under A.R.D.A. 3. Selling 42 4. Overall estimates of those likely to 44 participate successfully under A.R.D.A. (i) Table 44 (ii) Dalhousie-North Sherbrooke 45 (iii) Kitley 45 (iv) Overview 46

V. CONCLUSIONS: SUITABILITY OF THE 48 A.R.D.A. PROGRAMME FOR THE STUDY AREA 1. Enlarging 48 2. Selling 51 3. Conclusions 56

SELECTED BIBLIOGRAPHY 59

ix SOCIO-ECONOMIC FACTORS RELATED TO THE A.R.D.A. P ROGRAMM1 FOR LAND CONSOLIDATION AND FARM ENLARGEMENT IN EASTERN ONTARIO

I. INTRODUCTION

1. Background Considerable attention has been given recently to the problem of low farm incomes in Canada, particularly in those areas with relatively high incidence of small, uneconomic farms, often in regions of predominantly low capability farmlar.d.1

The following studies may be cited for illustration. V. Gilchrist, "A. Pilot Study of Income Alternatives Affecting the Movement of Farm Operators out of Agriculture," C.J.A.E., Vol. XI, No. 1, 1963, pp. 9-22. M.W. Menzies, Poverty in Canada: Its Nature, Significance and Implications for Public Poli.s.E. Manitoba Pool Elevators, Winnipeg, 1965. H.F. Noble, Variation in Farm Income of Farms in Eastern Ontario by Farm Type and Farm Class and An Economic Classification of .Farms in Eastern Ontario. Farm Economics, Co-operatives and Statistics Branch, Ontario Dept. of Agriculture and Food, Toronto, 1965. H.F. Noble, Socio-Economic Problems and Adjustment Needs of the Farm Family in Eastern Ontario. Farm -Economics, Co-operatives and Statistics Branch, Ontario Dept. of Agriculture and Food, Toronto, 1967. B.B. Perkins, Current Farm Income Problems in Canada. Department of Agricultural Economics, Ontario Agricultural College, University of Guelph, 1965. B. Touzel, "Study No.3, Lanark County," in Rural Need in Canada 1965: The Background of Rural Poverty in Four Selected Areas. Canadian Welfare Lomeli, Ottawa, 1966. In this regard, the Federal-Provincial Agreement of 1965 established the Agricultural and Rural Develop- ment Act (A.R.D.A.), a revision of the 1961 Act,2 to alleviate "the serious national problem of low income in rural areas".3 Federal-provincial action was to be directed first toward a more effective rural land use, and second, toward development of new opportunities for increased incomes, employment and living standards for rural people; the third Rural Development Agreement for the period 1970-75 has the same orientations.4

A general concensus among A.R.D.A.-oriented research workers is that one such low income farming area is that loosely defined as 'Eastern Ontario' bounded on the south by the St. Lawrence River and Lake Ontario shore, on the north and east by the Ottawa River. It includes the eleven county Eastern Ontario Development Region (Renfrew, Frontenac, and all counties to the east of these),and extends west of this region toward Lake Simcoe. Its areal extent is closely associated with that of two physiographic land types - shallow soil limestone lowlands and Precambrian shield upland (see Nap 1). The extent

2 A.R.D.A., Agricultural and Rural Development. Act • Annual Report 1965-66. Canada Dept. of Forestry, Ottawa, p.l. (This discusses the change of focus between the 1961 and 1965 A.R.D.A. agreements.)

3 A.R.D.A., Federal-Provincial Rural Development - Agreement 1965-1970, Canada Dept. of Forestry,) Ottawa, 1965, p.3.

4 Ibid, pp. 7-8. Also, Federal-Provincial Rural Development Agreement 1970-75, Canada Department of Regional Economic Expansion and Ontario Department of Agriculture and Food, pp. 3-6. of its low income problem may be illustrated by the results of an A.R.D.A. study (H.F. Noble, 1965) in the eleven county Eastern Ontario region. Of a sample of 299 farms, only 36% of the full-time farms, and only 17% of the part-time farms were capable of providing an adequate family living income from farm operations alone.

In 1966, the Province of Ontario initiated a farm enlargement and consolidation program for Eastern Ontario, under Part II of the A.R.D.A. agreement.5 The aim was to assist in establishing viable farms (a) through enlargement, consolidation, and basic improvement of submarginal farms, and (b) through the withdrawal from agriculture of areas unsuited for farming under the Alternative Larld Use Program of the Department of Lands and Forests. The program was also to be co-ordinated with the Manpower Retraining Scheme, so that farmers wto sold their farms for consolidation could attend vocational training schools with free tuition plus a living allowance.6

2. Scope and Objectives of Research In 1966, investigation was initiated into selected socio-economic factors likely to influence the successful operation of this A.R.D.A. program of farm enlargement and consolidation, alternative land use, and vocational retraining, in the low income farm areas of Eastern Ontario. In particular, attention was given, firstly, to the attitudes of farmers toward A.R.D.A., their awareness of A.R.D.A.,-

5 Ibid, pp. 13-14. 6 For further information, reference can be made to: "Proposed Policy for Farm Consolidation and Enlargement", bulletin distributed by Ontario Dept. of Agriculture and Food, A.R.D.A. Branch, Brockville Office, May 1966, 2 pps. OUTLINE OF EASTERN ONTARIO ECONOMIC REGION LIMESTONE PLAIN .KITLEY TWP. IN LEEDS COUNTY) PRECAMBRIAN SHIELD DALHOUSIE a NORTH LAKE SHERBROOK E TWF!

ONTARIO $ 2,000,000 And their interest in participation in the A.R.D.A. programme, and secondly, to socio-economic factors which were expected to influence, or at least be associated with, the above. In turn, this was to suggest the suitability of the A.R.D.A. progranme for the study area, given the attitudes, interest, and socio-economic circumstances of those likeLy to participate.

3. Study Area and Method Data for this analysis were gathered through f questionnaire interviews of random samples of 40 farmers in each of two townships selected for study. Dalhousie-North Sherbrooke Township, in Lanark County, was selected as typical of the law income rural conditions in the southern fringe of the Pre Cambrian shield - a region of predominately hi:1y, rocky land, generally Class V to Class Vii (i.e., submarginal) in agricultural use capability.7 The second was Kitley township in Leeds County, se:.ected as representative of low income rural conditions in the Limestone Plain of Eastern Ontario, a physto- graphic region, as defined by Chapman and Putnam (1966), of shallow soil over limestone bedrock, predominately of8Class IV to Class VI capability for agriculture. Both regions have a few small enclaves of higher capability farmland. 7,8 This refers to the classification used for the Canada Land Inventory, for which land is grouped into seven classes according to relative capability for agriculture under modern management techniques. Classes range from Class 1 through to Class 7, in order of increasing degree of limitation to agricultural use. Further reference can be made to: The Canada Land Inventory, A.R.D.A. Report No. 2, 1965,Soil Capability Classification for Agriculture, Canada Dept. of Forestry, Queen's Printer, Ottawa, 1966, pp. 5-11. (Footnote continued on next page) II. FIRST STAGE DATA PRESENTATION AND ANALYSIS

1. The Farm Situation in the Study Area A brief description of the farm situation in the study area, based on the simple data, may be useful as a frame of reference for the subsequent analysis.

(i) Type of Farm The regional agriculture consisted mostly of dairying, mixed livestock, and beef raising. Dairy- ing was more common on the Limestone Plain, beef raising being more common on the Precambrian Shield. This is shown by data for the 80 sample farms in Kitley and Dalhousie-North Sherbrooke townships.

(ii) Size of Farm The samplefarms tended to have relatively large total acreages, but the proportion of improved. land per farm tended to be small. With the higher

(footnote from previous page continued)

Agricultural Land Capability in the Study Area. Capability Class Kitley Dalhousie-North Sherbrooke % of town- Cumulative % of town- Cumulative ship acreage ship acreage % 2.8 2.8 0 0 5.9 8.7 0.8 0.8 0.4 9.1 1.2 2.0 4 8.4 17.5 1.3 3.3 5 1.2. 18.7 0.2 3.5 6 70.2 88.9 2.3 5.8 7 0.4 89.3 85.3 91.0 Organic 10.7 100.0 9.0 100.0 soils (classed separately)

6 TABLE 1

Type of Farm 'Utley Dalhousie- Combined N.Sherbrooke sample

Dairying (no other 20 21 enterprises) ••• Beef Raising (no other enter- 26 32 prises) Mixed livestock 11 8 19 Others 3 8 = 40 n = 40 N = 80 2

average agricultural capability of the Limestone Plain land type, farms there tended to have hii;her acreages of improved land, but smaller tOtal acreages, than farms on the Precambrian shield. This is shown below.•

TABLE 2

Total Farm Acreage Kitley Dalhousie- Combined N.Sherbrooke sample

0 69 2 0 2 70 - 129 10 4 14 130 - 239 15 8 23 240 - 399 7 8 15 400 - 599• 14 13 27 600 or higher 2 7 9 = 40 = 40 N = 80 TABLE 3

Improved Acreage Kitley Dalhousie- Combined (per farm) N.Sherbrooke sample

0-19 2 1 3 20- 39 2 11 13 40. - '79 19 23 42 80 - 159 12 5 17 160 or higher 5 0 5 =40 n) =40 N = 80

ii) Size of Farm Business In economic, rather than physical terms, farm sizes are relatively small. Levels of capital investment in land and buildings, in machinery and equipment, and in livestock, all tended to be low. As a result, total farm capital values were also low, as shown below.

TABLE 4

Total farm value Kitley Dalhousie- . Combined N.Sherbrooke sample

$0- $7,449 3 3 6 $7,450- $14,949 6 7 13 $14,950- $24,949 14 17 31 $24,950- $49,949 10 6 16 $49,950 or higher • 4 1 5 . =37 n = 34 2 N = 71 No response 9 Low gross annual sales were associated with these low, farm capital values, more than one quarter of the sample did not qualify as commercial farmers under the Census of Canada definition of having at least $1,200 gross annual sales.

TABLES

Gross Annual Sales Kitley Dalhousie- Combined N.Sherbrooke sample

less than $1,200 . 11 11 22 $1,200-$2,499 9 10 19 $2,500-$4,999 10 12 22 $5,000-$9,999 4 7 11 $10,000 or higher 5 0 5 n139= n2 40 N = 79 No response 1 0 1

A Chi square test at the 10% level did not show any significant difference, between townships, in the proportion of farms having "low"gross sales, using the criterion of under $2,500 gross sales.

On the criteria of less than $24,950 total farm value plus less than $2,500 gross annual sales, a considerable proportion of farms - 577 of those samples in Dalhousie-N.Sherbrooke, and 36% of those in Kitley - were small scale, low income operations. If part-time farmers are excluded, still a fair proportion - 26% of respondents in Dalhousie- N.Sherbrooke and 22% in Kitley - had total farm values of less than $24,950, gross sales of less than $2,500, and received no extra income from off farm employment. This can be viewed in the light of the A.R.D.A. definition of a "low income farmer" as having (a) less than $2,500 gross annual sales, (b) a total farm capital value of less than $24,950,

9 employment per and (c) less than one month off-farm current year. These farmers are considered, by income to Canadian standards, to have insufficient provide an acceptable standard of living.

Farm Management of It is generally accepted that the level the level of , farm management is closely related to factor farm income, and for the study area, this was investigated. con- •A major problem was the difficulty of ability structing an adequate indicator of managerial This and attitude (degree of progressiveness). score, con- factor was approximated by an arithmetic to structed from a weighted combination of responses farm several questions dealing with efforts at and plans improvement, farm management practices, of for future improvements. The major components components this score, and the weights assigned to are given below.

Components Maximum points possible 35 (a) farm enlargement 15 (b) renting land (c) sharing machinery 5 45 (d) made recent farm improvements 20 (e) planned farm improvements 40 (f) using farm improvement loans 5 (g) use of commercial fertilizer 5 (h) use of soil sampling 20 (i) use of government services (j) membership in farm organizations 10

Total (a, ..., j) 200

The method of constructing the score is farm illustrated below by the subscore on recent improvements.

10 (i) A first improvement; made = 10, not made = 0. (ii) Was this; very successful = 5, partly successful = 2, unsuccessful = 0. (iii) A second improvement; made = 10, not made = 0. (iv) Was this; very successful = 5, partly successful = 2, unsuccessful = 0. (v) A third improvement; made = 10, not made = 0. (vi) Was this; very successful = 5, partly successful = 2, unsuccessful = 0.

The maximum possible subscore for farm improvement is 459 and the system of scoring allows a reasonably smooth, though discontinuous, frequency distribution of possible scores.10 Subscores for the other components were constructed in similar fashion.

As can be seen, the score is a composite measure of ten separate indices of various aspects of management behaviour, representing the extent of efforts at increasing farm income capability, and indirectly, the level of farm management. In turn, this reflects relative managerial abilities, and progressiveness, or aggresiveness, of managerial attitudes among respondents: It is realized that there can be no guarantee of accuracy in measuring the level of farm management by assigning weights to different responses relating to management practices and decisions regarding farm improvement. Neither is there any guarantee that it is appropriate for its purpose, that is, in its assumption that managerial ability and attitude can be approximated by the level of current farm management. However, it is assumed that the scores are valid, although approximate, measures of relative managerial abilities among respondents, as evidencedby their efforts at farm improvement and management.

9 The maximum possible = (i) 10 + (ii) 5 + (iii) 10 + (iv) 5 + (v) 10 + (vi) 5 = 45. 10 Possible subscores are 0, 10, 12, 15, 20, 22, 24, 25, 27, 30, 32, 34, 36, 37, 39, 40, 42, 44, and 45.

1 Each respondent could have a score, from zero to a possible maximum of 200, and the system used for scoring allowed a reasonably continuous frequency distribution of scores among respondents. of This is illustrated by the following grouping scores.

TABLE 6

Management Score Dalhousie- Kitley Combined N.Sherbrooke township sample township

1 0- 19 points 0 10 20- 39 4 15 40- 59 8 60- 79 12 21 16 80- 99 9 7 7 100-119 4 3 7 120-139 3 4

3 •• 140-200 1 2 n = 40 =40 N = 80 1

This shows that most respondents had relatively low scores; 32 of 40 in Dalhousie-N.Sherbrooke, 100. and 31 of 40 in Kitley, had scores of less than This suggests that most farmers in the study area have relatively low managerial ability, or at least practice relatively low levels of management, and put little effort into improving farm income capability.

The above must be considered in the light of statistical testing, discussed later, which gives strong evidence for concluding that among farmers in the study area, managerial ability and attitude, as represented by the management scores, are of major importance in influencing their posture

12 regarding A.R.D.A. This suggests strongly that the incidence of successful participation in the A.R.D.A. programme will be low. This is discussed at the conclusion of this paper.

For Chi square testing, scores were trLcho- tomized into (1) law (under 60 points), (2) medium (60-99 points), and (3) high (100 plus) categories, and also dichotomized into (1) low (under 80 points) and (2) high (80 plus) categories.

Test results show no significant difference, even at the 10% level, In the distribution of high, medium, and low scores between respondents in Kitley and Dalhousie-N.Sherbrooke townships (x2 2df = 0.24 and x21df = 0.05). From this, it is inferred that level of farm management and managerial ability are not influenced by, or related to, relocation on the Precambrian Shield land type versus location on the Limestone Plainland type.

In contrast, age is significantly related to level of farm management; younger farmers (uncial. age 55) tend to have higher management scores (x2 2df = 14.35). As discussed in'a later section, it is inferred that level of management is dependent on age.

As shown by the sample data below, there are very few young farmers in the study area. This skewed age distribution made it necessary, for subsequent• Chi square testing, to dichotomize the data into "younger" and "older" at the relatively high age of 55, whereas age 45 would have been preferable.

The subsequent analysis of the likelihood of A.R.D.A. success in the study area is to a large extent framed in terms of the association of low farm incomes with the high proportions of older farmers and low management levels. To provide a sound factual basis for this analysis, it is advisable to present complete data on respondents' awareness of attitude toward, and interest in, the A.R.D.A. programme.

13 TABLE 7

Age of Respondents Kitley Dalhousie- Combined N.Sherbrooke sample

Under age 35 2 3 5 8 35 - 44 4 4. 31 45 - 54 16 19 55 - 64 10 9 16 65 or older 7 9

= 39 = 40 N = 79

No response

2, Awareness, Attitudes, and Interest in A.R.D.A.

(i) Awareness of A.R.D.A. Respondents in Dalhousie-North Sherbrooke appeared slightly more aware of A.R.D.A. as follows:

Aware of: Dalhousie- Kitley N.Sherbrooke

A.R.D.A. per se 31 of 40 23 of 40 County A.R.D.A. Committee 19 of 40 17 of 40 A.R.D.A. farm enlargement 28 of 40 22 of 40 programme

However, Chi square tests at the 5% level showed that those in Dalhousie were not significantly more likely to be aware of either A.R.D.A. per se, their county A.R.D.A. committee, or the A.R.D.A. farm enlargement programme. The reader is reminded

14 that this survey was conducted in the first year of this programme.

Although a high proportion (63%) of respondents had heard of the farm enlargement programme, most had little knowledge of its terns and operation, often not realizing it was under A.R.D.A. As this had been anticipated, all respondents were then given a 400-word abstract about the programme so that all had an equal basis of information for answering questions concerning it.

(ii) Attitudes toward A.R.D.A. The subsequent reactions of respondents to the A.R.D.A. programme were as follows:

TABLE 8 Attitude toward the present A.R.D.A. farm enlargement programme

Dalhousie- Kitley Combined N.Sherbrooke sample

Agree strongly 11 21 32 Agree slightly 27 13 40 Neutral 0 3 3 Disagree slightly 2 2 4 Disagree strongly 0 1 1 Total 40 40 80

As shown above, most respondents were in favour of both the present A.R.D.A. programme and government involvement in farm enlargement and consolidation assistance. In addition Chi square tests show that those in Kitley were significantly

15 more likely to "agree strongly" with both the A.R.D.A. involvement programme (X2 ldf = 5.21) and government in this field (Xz ldf = 5'30).

TABLE 9 Attitude toward government involvement in the field of farm enlargement and consolidation.

Dalhousie- Kitley Combined N.Sherbrooke sample

Agree strongly 7 17 24 Agree slightly 20 10 30 Neutral . 7 5 12 Disagree slightly 5 3 8 Disagree strongly 1 5 6 80 Total 40 40

On the other hand, relatively few believed meet that the programme, in its present form, would - the needs of any substantial proportion of farmers in the study area. This is shown by Table 10 below.

TABLE 10

A.R.D.A. programme Dalhousie- Kitley Combined will meet the N.Sherbrooke sample needs of local farmers:

"In most cases" 9 7 16 "In a few cases" 23 24 47 "In no cases" 8 9 17 Total 40 40 80

16 This suggests that the programme may be ill- suited to local conditions. Unsolicited reason:3 given were, in general, that (a) most farmers, although too old to enlarge their farms, did not want to sell as their farms represented security, and (b) most farmland was of such low capability (and in Dalhousie-North Sherbrooke, too fragmented) that often even enlargement could not produce aa economic farm.

(iii) Interest in Participation

Respondents were much less likely to express interest in participation than agree with the programme. In Dalhousie-North Sherbrooke, nearly all (38 of 40) agreed with the programme, but only two- thirds (27 of 40) actually expressed interest in participation. In Kitley, most (34 of 40) agreed with the programme, but scarcely one half (18 of 40) expressed interest in participation. Complete data are given below.

TABLE 11

. Expressing interest Dalhousie- Kitley in enlarOng only. N.Sherbrooke a) qualified as well as unqualified interest 8 of 40 12 of 40 (b) unqualified interest only 6 of 40 9 of 40 II. Expressing interest in sellinz. (a) qualified as well as unqualified interest 19 of 40 6 of 40 (b) definite interest in selling, retraining, and leasing farm residence under A.R.D.A.. of 40 2 of 37

17 (c) definite interest in selling, retraining, and re-establishing 2 of 37 with A.R.D.A. assistance 10 of 40 (d) those in (b) and (c): N.B. some expressed interest in both options, thus estimates (b) plus 3 of 37 (c) are greater than (d) 13 of 40

(a) Enlarging Chi-square testing at the 5% level shawed more that those in Kitley were not significantly unqualified likely to express either qualified or relatively interest in enlarging. In both areas, several few expressed interest in enlarging and under qualified their interest as to circumstances common which they would participate.. The most respondents), reasons were (a) poor health (11% of all and (b) advanced age (19% of all respondents), the farm related to both (c) inability to manage all respon- adequately if it were enlarged (31% of objected to dents). It can be noted that no one pro- participation because this was a government those (20 gramme. It is worth noting further that under A.R.D.A. of 80) expressing interest in enlarging of 80) who had are nearly twice as many as those (11 their own - been seriously considering enlarging on in respondents being more likely to show interest were enlarging farm income capability once they This informed of the change of A.R.D.A. assistance. suggests the value of a more intensive publicizing success of the A.R.D.A. programme to achieve greater in terms of particpation.

(b) Sellinz basis of testing at the 5% level On the - 9.42), interest in selling in Dalhousie (X2 ldf =

18 North Sherbrooke • (47.5% of respondents) is significantly higher than in Kitley (15%). In both townships, several strongly qualified theirinterest, and might better have replied "No, except under special circumstances". The most frequent reasons for not expressing interest were that (a) the selling price of the farm -might not be high enough (38% of all respondents), and (b) vocational training would not be worthwhile - as many were 55 or older (26% of all respondents).

A more precise estimate of interest in selling was whether the respondent was interested in (a) selling his farm but retaining a life-time lease of his farm residence (plus the option of vocational training) or (b) selling, moving with the aid cf the re-establishment grant, and retraining. As shown by Table 11 (a) considerably fewer expressed definite interest in these specific options than originally expressed interest, and (b) interest is• again higher in Dalhousie-North Sherbrooke, although only with selling plus re-establishing do test 2. results show that it is significantly. higher 5.61). (X ldf = It should also be noted from Table 11 that. the proportions of respondents expressing definite interest in selling and in enlarging are, at the township level, noticeably unequal. In particular, Dalhousie -North Sherbrooke has many more who are Interested in selling than are interested in enlarging their farms. As discussed later, this suggests that A.R.D.A. farm enlargement and consolidation may meet difficulties in its operation.

(iv) Alternative Land Use Respondents were asked their opinion of the idea of "alternative land use", where farmland of low agricultural capability is purchased by the government and transferred to another use, such as forestry, for which it is better suited. As with farm enlargement and consolidation, respondents appear overwhelmingly in favour of alternative land use; this is shown below.

19 TABLE 12

Dalhousie- Kitley Combined N.Sherbrooke sample

11 Agree strongly 13 16 29 Agree slightly 21 16 37 7 Neutral 4 3 Disagree slightly 1 2 3 Disagree strongly 1 3 4 Total n.. = 40 =40 N = 80

In contrast, only 32% of respondents actually expressed interest in selling farmland for alternative use, and several of these said they would sell only under certain conditions; only 19% gave an unqualified "yes". However, this was expected as many, while agreeing in principle with alternative land use, gave such reasons as (a) their farmland was "too good for reforestation" (15% of all respondents), (b) they would not receive a high enough price per acre (34% of respondents), or (c) they are simply not interested in selling (347 of respondents).

Chi square tests show that those in Dalhousie- N.Sherbrooke (19 of 40) were significantly more likely than those in Kitley (6 of 39) to express interest in selling land for alternative use (X21df= 9.42). Similarly, they were more likely to express unqualified interest in such (14 of 40 versus 1 of 39, X2 ldf = 13.51).

11 A Chi square test at the 57 level did not show any significant difference, between townships, in the proportion "agreeing strongly" with alternative usex2 = 0.35). land ldf

20 (v) Attitude .toward a Proposal for a more Compr3hen- sive Rural Rehabilitation Programme Respondents were asked for their opinion of a proposal for a more comprehensive programme of assistance than the current A.R.D.A. combinatio-1 of farm enlargement and consolidation, vocational training, and alternative land use. This would involve, in addition to that under the current ?ro- gramme, more comprehensive rehabilitation assistance (re-training and re-establishment), concentratel on a more definite regional focus. The objective -would be primarily development of the human resource, and only secondarily, land rationalization and formation of economic farm units. Such a programme could be set up under parts V and VI of the 1965 Federal- Provincial agreement.12 This question simply attempted to obtain a preliminary estimate of the type of reaction it would elicit, as respondents live in the type of low income farming area, of low capability land, to which this type of programme could apply. Table 13 below presents the responses obtained.

TABLE 13

Dalhousie- Kitley Cowbined N.Sherbrooke sample

Agree strongly 3 6 9 Agree slightly. 23 11 Neutral 34 5 8 13 Disagree slightly 9 9 18 Disagree strongly 0 6 6 Total n = 40 n = 40 N 1 2 = 80

12 Reference can be made to: A.R.D.A. Federal- Provincial Rural Development 1965-70, Canada Dept. of Forestry, Ottawa, 1965, pp. 17-20. The 1970-75 Agreement has a more limited provision of this kind in Part V, and the main responsibility now lies in other agencies such as Fund for Rural Economic Develop- ment and the other activities of Federal Dept. of Regional Economic Expansion and the Ontario Government. • 21 Test results show that those in Dalhousie- to North Sherbrooke are significantly more likely the agree with such -a programme -2(Y 1df = 4.07). For are in combined sample, only a slight majority (54%) favour of the proposal, so that the overall attitude assis- toward this more comprehensive type of rural toward tance is definitely less favourable than that enlarge- the current A.R.D.A. programme of (a) farm and ment and consolidation plus vocational training (b) alternative land use. The types of objections its to this proposal suggest that this is because aspects more comprehensive scope involves several A.R.D.A. of assistance not included in the current programme, to which respondents may object.

III. FIRST STAGE DATA ANALYSIS

1. The Statistical Analysis

(i) •Nature of Hypotheses Tested For statistical analysis, the data collected and were translated into statistical variables, following viewed as groups of factors comprising the sets of information: farmers ) factors (X ,---X ), representing awareness of and attitudes toward A.R.D.A., and their interest in participating in the A.R.D.A. programme.

plans ) factors (X:r.4. representing farmers' for farm improvement.

asses- (c) factors representing farmers' ment of their economic position, expectations for the future, and awareness • of change in their farming community.

22 • d) factors (K ---X ), representing farmers' In+1, n past efforts and decisions regarding farm management and improvements.

) factors ---X , various descriptive Xn+1, p indica- tors of the type of farm operation.

(f) factors (K ---X ), representing .0.1, various attributes of the farmers.

(g) factor X q+ distinguishing between location in Kitly or Dalhousie-North Sherbrooke.

The expected form of the interaction among these factors is summarized by the model presented in Figure 1.

The hypothesized relationships could be expressed in a set of generalized algebraic statements, as follows:

1. (X1,---Xg)= f(Xel,---Xh), (X1141,---Xm),

(X ---X), , , m+1, n n+1,p p+1, X q+1.

2. ---Xh) = f(X1,---Xg), , ---X ), (Xm+1, n

(Xn ---X ), , X +1, p (Xp+1q q+1•

= f(Xm+1,---Xn)'(X n+1,---Xp)' (X--X), X p+1, q+1.

23 P

---X

regarding

---Xh

improvement

n+1,

farm characteristics

Xaf

plans

farm

---X

attributes

FIGURE

---X

participation!

p+1,

location

farmers

interest

opinion

(attitude)

community

improvement

efforts

farm

situation

---X

___x

changes

m+1,

h+1,

X decisions,

regarding

management,

X assessment

and personal ---X , 4. (X 1 .---X) = f X ---X ), +1 q

q, • n+1, p P X q+ •

of the other 6. Where (X ---X ) are independent P,+1 q among groups of factors, but are interrelated and wh re X is, by definition, themselves, e q+1 independent.

That is, it was held that the personal the farmer characteristics and circumstances of regarding farm acv+1,---x0 influence his decisions n). Added to improvement and management (Xm+1,---X past manage- this is a two-way interaction between of ment decisions and the economic characteristics of factors, the farm. Moreover, all three sets iii+1,---Xn), (Xp+i, ---Xa), (Xn+1,---Xp) and (X present economic influence (a) his assessment of his (Xhil,---Xm), circumstances and outlook for the future improvement and (b) his plans for further farm above sets of (X 41 ---Xh). In turn, all of the g of, atti- factors combine to influence his awareness in, the tude toward, and interest in participating is further A.R.D.A. programme (X1,---Xg). There toward, interaction between the farmer's attitude and A.R.D.A. and his interest in participation, and his between his plans for farm improvement views regarding A.R.D.A.

(ii) Method of Testing, and Data Processing In testing this general model of hypothesized by one or relationships, each factor was represented

24 more statistical variables, of which at least one was in dichotomous form. As illustration, factors ---Xcp included such farmer attributes as age and eaucation. For the question in point, the responses of the 80 farmers sampled were combined to form the statistical -variable. For example, to form the "age" variable, responses were dichotcmized into (1) age 55 and older, and (2) under age 55. Where possible, the 80 responses on a subject were also trichotomized to form a variable. For example, proportion of household income provided by the farm provided (a) a trichotomous variable (1) less than one-third, (2) one-third to two-thirds, (3) two-thirds or more, as well as (b) a dichotomous variable (1) less than one-half, (2) one-half or more. This permitted a more meaningful interpretation of the results of statistical testing with respect to how different variables were related. However, in many cases where responses were simply "yes" or "no", or where the uneven distribution of responses among intended categories prevented formation of a testable trichotomous variable, only a dichotomous variable was possible.

The hypothesized model has been given in generalized form as a set of relationships between groupings of factors. For testing of hypothesized relationships between factors, this model was reduced to its simplest form as a series of individual, hypothesized associations between pairs of individual variables. Statistical testing could then be carried out for the presence of statistically significant associations between each given pair of variables. Each acceptance of positive or negative association between a pair of variables could be used as evidence for the more general composite relationship hypothesized in the model.

The purpose of the analysis was in each case establish, to at stated levels of probability, whether the two variables were associated statistically. Given the qualitative nature of much of 25 in grouped or cate- the data collected, of necessity dichotomized form, the gorized form, and often in appeared the Chi-square (x2) Test of Independence best suited for this purpose. of variables in Because of the large number because of the limited the original analysis, and not possible to give space available here, it is of all variables, or either a complete definition the relationships hypo- any complete discussion of results of hypotheses- thesized among them and the aim of this report is testing. As a result, the section simply gives a. more limited. The following which were accepted brief outline of those factors the 5% level, as signi- upon Chi square testing at in participating in ficantly related to interest the A.R.D.A. programme. .the statistical Subsequently, the results of the data on interest testing are co-ordinated with presented earlier, to give in A.R.D.A. participation of farmers, in this low estimates of the proportions likely to benefit by income study area, who are In turn, this leads participating under A.R.D.A. suitability of the to conclusions regarding the study area, given the A.R.D.A. programme for the circumstances of its attitudes and socio-economic farmers.

2. Results of Statistical Testing

in enlarging under (i) Factors related to interest programme the A.R.D.A. farm enlargement were dicho- For statistical analysis, data to whether or tomized as "yes" or "no" according enlarging• not respondents expressed interestin Chi square tests at under A.R.D.A. Subsequently, led to the acceptance the 5% level of significance significant in of several factors as statistically interest in A.R.D.A. their association with expressed

26 who expressed farm enlargement. Specifically, those were signifi- interest in enlarging under A.R.D.A. cantly more likely:

55 CY 6.72). (a) to be under age --21df = least $2,500 (b) to have annual gross sales of at =3.95). (X21df scores ) to have higher farm management (X22df = 8.83). farm (d) to state definite plans for further 9.40).• improvements N2-- 1df = increase (e) to believe that they could significantly (x2 = 4.85), net farm income by re-organization 1df and enlargement (x21df = 5.55). ( = (f) to have high awareness of A.R.D.A. .X2 1df se, tteir that is, to have heard of A.R.D.A. per A.R.D.A. local county A.R.D.A. committee, and the farm enlargement programme. A.R.D.A. to "agree strongly" with the current • CO and farm enlargement programme ( ldf = 10.04), involvenent to agree with the idea of government consolida- in the field of farm enlargement and = 10.98). tion (Y--21df toward A.R.D.A. (h) to have a positive overall attitude that is, to agree with each of the (X21df = 7'49), A.R.D.A. programmes for farm enlargement and consolidation, vocational training, and alterna- more tive land use, as well as a proposal for a comprehensive rural assistance programme.

As hypothesized, both the age of the farmer his and his management ability (as reflected by level of farm management) are significant; younger higher farmers (under age 55), as well as those with

27 management scores, are more likely to express interest in enlarging under A.R.D.A. In addition, both factors exert an indirect influence through theirassociations with several of the other factors significantly related to interest in enlarging under A.R.D.A.

Firstly, younger farmers tend to have higher management scores ( -X 2df = 14.35). Thus, as expected, younger farmers put greater effort into farm improvement, and, it is inferred, are better, more progressive managers. In support of this, younger farmers are more likely to have definite plans for further farm improvements (x21df = 11.65). In turn, those who have made specific improvements within the previous ten years are more likely to state plans for further improvements (0( 21df = 22.76). These associations all support the hypothesis that younger farmers tend to be better managers because they (a) have longer 'planning periods' over which to expect returns from any farm investment, (b) are more physically able, and (c) more aggressive in their ambitions and efforts in farm improvement and management. On the other hand, older farmers are closer to retirement (with shorter range plans), less robust in health, and likely more willing to accept their present situation, so that they are less aggressive in their managerial attitude. In turn, this is a factor accounting for their lesser interest in enlarging under A.R.D.A.

Secondly, age is significant in that younger farmers are more likely to believe that they could increase net income by farm reorganization (x2ldf = 4.05), and in turn, those who believed they could ) increase net income by reorganization were more likely to express interest in enlarging under A.R.D.A.

In addition, although age of the farmer was not significant in relating to level of gross sales, level of farm management was significant. Those with gross sales of $2,500 or more tended to have higher

28 2 more management scores (X 2df = 7.57), and were likely to express definite plans for future farm 2 improvements, (X 2df = 8.63). From this, it is inferred that level of management, and managerial attitude, are factors in determining farm income capability - the more progressive farmers having :he larger farm businesses. In addition, a "snowball effect" is inferred in which those with farms of higher income capabilities, because of these higher farm capabilities, are more likely to continue making a greater management effort - as opposed to those who, because of their lower farm income capabilities, nay be more pessimistic over chances of any farm imprpve- ments making a worthwhile increase in farm income. This is supported further by the fact that those who had made improvements within the previous ten years were more likely to express definite plans for further improvements - as stated earlier. In short, those who are more progressive in their current record of farm improvement also tend to be more progressive in their ability to plan ahead and anticipate the continuing need for further improvements. This process is loosely analogous to that of Myrdal' "circular and cumulative causation".13

The management factor also affects interest in enlarging under A.R.D.A- indirectly through its relationship with awareness of A.R.D.A. - the more progressive managers tending to have higher awareness. Specifically, the higher the management score, the more likely the farmer has heard of (a) A.R.D.A. per se, (b) the local county A.R.D.A. committee, and (c) the A.R.D.A. farm enlargement programme (X ldf = 11.03). However, level of management was not significantly related to attitude toward A.R.D.A-

13 G. Myrdal, Rich Lands and Poor, Chapter II, "The Principle of Circular and Cumulative Causation." Harper and Bros., New York, 1957.

29 In addition,. age indirectly affects interest in enlarging under A.R.D.A. through its relationship with attitude toward .A.R.D.A. Specifically, younger farmers were more likely to "agree strongly" with the A.R.D.A. farm enlargement programme. However, age is not significantly related to awareness of A.R.D.A.

The above does not appear to require further discussion, insofar as those with high awareness of A.R.D.A., and those who "agreed strongly" with the A.R.D.A. farm enlargement programme, were, as expected, more likely to express interest in enlarging.

On the other hand, test results, again at the 5% level, indicated that none of the following were significantly related to interest in A.R.D.A. farm enlargement.

(a) level of education and marital status.

(b) location between townships and type of farm.

(d) presence of off-farm employment and relative importance of farm and off-farm incomes.

belief that the farm alone (or for part-time farmers, the farm plus off-farm job together), could provide enough income for a satisfactory standard of living.

(f) size of improved acreage, total farm acreage, value of land and buildings, and total farm value - all reflecting farm income-capability.

30 Factors related to Interest in Participating in the A.R.D.A. Farm Enlargement and Consolida- tion Programme as eseller"

As with interest in enlarging, data regarling interest in selling the farm for consolidation, with the option of vocational training, were simply categorized as "yes" or "no". The small numbers )f respondents interested in vocational training, and interested specifically in re-establishment aid as opposed to a lifetime lease of the farm residenca, caused such low expected frequencies in the Chi square tests that it prevented acceptable testing of the significance of factors influencing interest in these options. Therefore, testing was carried out simply in terms of factors related to interest in selling for farm consolidation regardless of option preferred. In brief, those who expressed interest in selling for farm consolidation under A.R.D.A. were, at the 5% level of significance:

(a) more likely to be in Dalhousie-North Sherbrooke, on the Precambrian Shield, than in Kitley on the Limestone Plain (Y--21df = 9.42).

(b) more likely to be beef or mixed livestock farmers than dairy farmers (dairying as. the sole (x2 enterprise) ldf = 5'73).

(d) less likely to have(;22s:nf expected to continue the fafarm operation 6.49).

(e) likely to have lower management scores (X22df = 10.11).

(0 less likely to have made specific farm improvements within the previous ten years (x2idf = 7.15).

31 (g) less likely to have definite plans for further farm improvements (X21df = 5'74). (h) more likely to agree with a proposal for a programme of more comprehensive rural assistance than that provided by the then current A.R.D.A. 2 programme (X ldf = 6.86).

(i) more likely to also express interest in selling farmland for alternative land use under A.R.D.A. (X21df = 39'99). (j) among those with off-farm employment, those who believed that their farm income alone was insufficient for a satisfactory standard of living wee more likely to express interest in selling 5.06). (X ldf =

Both location between townships and type of farm are associated statistically with interest in selling. However, since tle of farm is highly associated with location (X 2df = 22.85), only one may in fact be functionally important. Firstly, dairy farms were the most common type in Kitley, but were almost absent in Dalhousie-North Sherbrooke, where beef and mixed livestock farms predominated. Secondly, both dairy farmers, and farmers in Kitley, were less likely to express interest in selling. It appears likely that type of farm is functionally important, and it is inferred that dairy farmers are more likely to want to continue farming, rather than sell, as their milk contracts under the Ontario Milk Marketing Board assure them a more regular farm income than beef or mixed livestock farmers, and thus they are likely to be more optimistic over their ability to maintain a viable farm operation. However, location may be a factor too, as farmers in Dalhousie-North Sherbrooke were more likely to express interest in selling_ farmland for alternative land use as (X21df = 39.99) well as selling for farm consolidation. There is no corresponding association with type of farm, and it

32 therefore appears that the generally lower .agricultural capability of land in the Precambrian Shield may be a factor influencing interest in selling. Nevertheless, this difference in average land capabilities was not reflected by any significant tendency for farms in Dalhousie-North Sherbrooke to have lower income capabilities - in terms of gross annual sales or total farm value. In this regard, those with lower total farm values (below $24,950) were more likely to express interest in selling. As expected, those with farms of such low income capability were more likely to think it more worthwhile to sell, and retrain for a non-farm occupation, than to continue trying to made an adequate living income from the farm. In support of this, part-time farmers who believe that their farm incomes alone are insufficient for an adequate living income, are more likely to be interested in selling and retraining. This relationship is not significant for full-time farmers - apparently because, not having off-farm employment, they may be less familiar with non-farm occupations and thus less willing to sell and retrain - either because this may seem to entail too much risk, or because their preference for farming is too strong.

Level of farm management and managerial attitude are clearly related to interest in selling, their relationship being linked to that discussed earlier with reference to interest in enlarging. Firstly, those with higher management scores, being more progressive in their efforts at farm improvement and management, as well as those having made specific improvements within the past ten years, and those with definite plans for further improvements, are all less likely to express interest in selling. On the other hand, they are more likely to express interest in enlarging. In short, and as expected, the more progressive farmers tend to be interested in enlarging, not selling. In turn, they tend to have farms of higher income-capability - in terms of gross annual sales and total capital value (as discussed in

33 the preceding section) - this being another factor why they are less likely to express interest in selling. On the other hand, consider those with lower management scores, who are less progressive in both their current record of farm improvements and their plans for further improvements, and who tend to have lower farm income-capabilities because of less effort put into improvement. It appears that, through a cumulative 'snowballing'. process, they tend to be more pessimistic over their chances of increasing farm income-capability, are thus less interested in enlarging, and more interested in selling and re-training with A.R.D.A. assistance and this seems, to them, a more worthwhile alternative. In addition, those with less progressive or less aggressive managerial attitudes may be less willing to accept the added responsibility of farm enlargement.

Another factor is that those without a son to continue the operation of the farm are more likely to express interest in selling under A.R.D.A. This should not require further comment.

Also needing little comment - those interested in selling for farm consolidation are also more likely to express interest in selling farmland for alternative use under A.R.D.A. Unexpectedly, they were not significantly more likely to "agree strongly" with the idea of alternative land use. However, they were more likely to agree with a proposal for a programme of more comprehensive rural assistance, particularly regarding re-establishment ) and rehabilitation, than provided for by the current A.R.D.A. programme. It would appear that those interested in selling their farms, and probably retraining and re-establishment, are more likely to favour a programme of more comprehensive assistance for such - as they would be the ones to benefit from it. Further, the reason why those interested in selling were unexpectedly not significantly more in favour of the current A.R.D.A. farm enlargement

34 programme appears to be that its provisions for . rehabilitation assistance seemed inadequate - this was substantiated by the questionnaire results.

In addition, the following factors were, on the basis of tests at the 5% level, not significantly related to interest in selling for farm consolidation under A.R.D.A.

(a) age, education, marital status and size of family.

(b) presence of off-farm employment and relative importance of farm and off-farm incomes.

-(c) level of gross farm sales.

(d) for full-time farmers (no off-farm job) • - whether the farm income alone wss considered adequate for a satisfactory standard of living. for part-time farmers - whether the combined income from farm and off- farm job was considered adequate for a satisfactory standard of living.

(e) awareness of A.R.D.A. and attitude toward A.R.D.A.

IV. SECOND STAGE DATA ANALYSIS

. Introduction Preceding sections have given, firstly, the responses of farmers in the study area regarding (a) awareness of, (b) attitude toward, and (c) interest in participating in, the A.R.D.A. farm enlargement programme for eastern Ontario, and secondly, the results of testing hypothesized relationships between respondents' socio-economic circumstances (a selection of socio-economic variables) and their interest in participating in the A.R.D.A. programme.

35 These data are examined, in combination with those giving the distribution of the more relevant socio- economic variables among respondents, to give some estimate of the suitability of the current A.R.D.A. programme for the study area. This is expressed in terms of the probable extent of its success in achieving its goals, given the extent of interest • in participation on the part of those farmers most likely to benefit from participation.

In short, the above involved, first, use of the Chi square test results to define the types of farmers most likely to express interest and participate successfully in the A.R.D.A. programme either by enlarging, or by selling, and second, co-ordina- tion of this with data on the amount of interest among respondents in such participation, in order to estimate the proportions of such farmers in the study area. These farmers are identified by their interest in participation plus possession of those socio- economic characteristics accepted as most relevant to successful participation.

2. Enlarging

(i) Defining those most likely to enlarge successfully under A.R.D.A.

a) The criteria selected, upon the results of the statistical analysis, for defining those farmers most likely to enlarge under the A.R.D.A. programme and •to successfully increase farm income by doing so, are given below.

(1) An expressed interest in enlarging under the programme (27% of respondents).14 (2) A "high" management score of at least 80 of 200 possible points (42% of respondents).

14 It appears redundant to include attitude toward A.R.D.A, among the criteria; those interested in participation would automatically be generally in favour of the programme.

36 Successful operation of an enlarged farm level of would appear to require at least a minimum management and the above measure is arbitrarily managerial selected as including those of sufficient managerial ability and sufficiently progressive attitude to accomplish successful farm enlargement. association In this regard, testing showed a high and between interest in enlarging under A.R.D.A. high management scores. specific (3) Statement of definite plans for farm improvements (44% of respondents).

This narrows the selection to those whose only to progressive managerial attitudes apply not and their current record of farm improvements to management practices, but also to their ability furthe.1- plan ahead, and to recognize the value of improvements of farm income-capability. Again, between test results indicate a high association in definite plans for farm improvement and interest enlarging under A.R.D.A.

(4) Age of less than 55 years (56% of respondents). as An age limit of under 55 years is included, likely it is held that those who are older are more of to have unsatisfactory health, and to be thinking thus full or partial retirement within a few years, and having a relatively short-term planning outlook ,atti- a less progressive, less flexible, managerial 55), tude. In contrast, younger farmers (those under tending to have better health and a longer planning span - or time in which to gain returns from investment in enlargement-should be more likely to succeed in farm enlargement. In support of this, the test• likely results show that those under age 55 are more to (a) express interest in enlarging under A.R.D.A., (b) have definite plans for farm improvement, and (c) have high management scores.

37 (5) Annual gross farm sales of at least $2,500 (487 of respondents).

Successful enlargement requires a certain minimum size of farm business, and sufficient income-capability to give a core for an economic farm unit. Therefore, level of gross sales is used as a rough measure of the economic size of the farm before enlargement; those under $2,500 gross sales are considered unlikely to offer potential as cores for successful enlargement.15 It is realized that gross• sales is a result of level of management as well as of income-capability, and is thus only an indirect measure of the latter. However, both those with high gross sales and those with high management scores are more likely to express interest in A.R.D.A. farm enlargement.

b) Variables not included as criteria for defining those likely to enlarge successfully under A.R.D.A.

Type of farm is not considered a significant factor in selecting those likely to enlarge successfully under A.R.D.A. Test results show a lack of significant association between type of farm and interest in enlarging under A.R.D.A. Although dairy

15 Even $2,500 is too low a figure; A.R.D.A. initially considered that at least $4,000 gross sales was needed to give potential for an economic unit. However, $2,500 was, used in this analysis to give• "marginal" candidates the benefit of the doubt, and to give a resultantly "optimistic estimat,e". Currently A.R.D.A. does not apply a rigid rule on this point, and considers sales volume in conjunc- tion with other factors which would affect a farmer's ability to create an economic unit. Further reference can be made to pages-143-144, H. Buckley and E. Tihanyi, Canadian Policies for Rural Adjust- ment, Special Study No. 7, Economic Council of Canada, Ottawa, 1967.

38 farmers are more likely than beef or mixed livestock farmers to express interest in continuing their farms as opposed to selling under A.R.D.A., this is probably because their milk contracts, guarantee:Ing a market for their produce, make them more optinis- tic over their farms' continuance as viable units, and not because they have a more progressive managerial attitude per se. In fact, test results show that dairy farmers are not significantly more likely to have high management scores, definite . plans for farm improvement, or high gross sales, and are not more likely to be under age 55. It therefore appears unlikely that dairy farmers who enlarge under A.R.D.A. would have greater success.

Similarly, off-farm employment and the relative importance of farm and off-farm incomes are not included as criteria. Full-time farmers are not significantly more likely than part-time farmers, to express either interest in enlarging under A.R.D.A- or definite plans for farm improvements. Neither are they less likely to express interest in selling under A.R.D.A. Further, although there is some evidence that full-time farmers tend to be better managers and to have higher gross sales, it appears more logical simply to use level of gross sales and farm management scores as more direct measures without adding to the criteria.

(ii) Estimate Thirteen of forty respondents in Kitley, and nine of forty in Dalhousie-North Sherbrooke, expressed interest in enlarging under A.R.D.A. However, only five respondents in Kitley, and only one in Dalhousie-North Sherbrooke, qualify as likely to successfully increase farm income to form an economic unit by enlarging. That is, only 39% of those in Kitley expressing interest in enlarging under A.R.D.A., and only 11% of those in Dalhousie-

39 North Sherbrooke were also under .age 55, with gross sales of at least $2,500, management scores of at least 80 of 200, and definite plans for farm improvement.

Since the above estimates of the number of respondents likely to successfully enlarge their farms are based on an arbitrary selection of criteria, it appears advisable - given the relative scarcity of those qualifying under the above definition - to give an alternative estimate based on slightly less restrictive criteria. This revision includes all those in the previous estimate, as -well as those who did not actually express interest in enlarging under A.R.D.A., but who appear capable of enlarging, since (a) their reasons against enlarging centre upon doubts over the risk, uncertainty, and costs involved in enlarging and the lack of available farm help, and (b) they satisfy the other criteria. In the future, many of these farmers may decide to enlarge under A.R.D.A.

Use of these more generous criteria gives higher estimates of 8 of 40 respondents in Kitley, and 3 of 40 in Dalhousie-North Sherbrooke. Even these are relatively small proportions, and this suggests only a limited success for A.R.D.A. farm enlargement in the study area - particularly in the Precambrian Shield (Dalhousie-North Sherbrooke). This is discussed subsequently.

In estimating the likely success of the A.R.D.A. programme, it appears desirable to consider the number of farmers participating as "enlargers" in terms of a ratio of "enlargers" to "sellers". This is because both"sellers" and "enlargers" are needed for the programme to work. Those who enlarge can only do so by the addition of land transferred from those who sell their farms for consolidation.16

16 On the other hand, farmers could sell their land for Alternative Land Use even if no other farmer wanted to enlarge his acreage. 40 For the study area, the assumption is made that maximum success in terms of participation would require one-half of the farmers to enlarge their farms, with the other half selling theirs fpr consolidation with the former. This would imply that every farmer had "adjusted". With the pre- dominance of low-income farms in the study area (75 of 80 respondents had gross annual sales of less than $10,000), it appears likely that every farmer could increase income either by enlarging (if capable of doing so successfully), or by selling his farm and re-training for a non-farm occupation (if young enough to obtain employment. In some cases, it might be that a ratio of more than "enlarger" to one "seller" is necessary, where each farm sold to A.R.D.A. can be divided among several "enlargers" and this being sufficient to make each enlarged • farm economic. In other cases, a ratio of more than one "seller" to one "enlarger" might be optimum where more than two farms must be combined to make one consolidated, economic farm. For the study area, in the absence of better information, an average ratio of one Y'seller" to one "enlarger" is assumed. This would appear to imply that the better farmers, who enlarge their operations, are capable of managing about twice as much acreage as they now have and generate a good annual family income after all adjustments. Although this one to one ratio would require refining if detailed economic data were available, it appears, to be more appropriate than, say, either a two to one or a one to two ratio. In any case, it is meant to be used simply as a frame of reference in estimating the likely extent of successful A.R.D.A. participation, and must be treated as such.

Even with the use of the above benchmark, in which the number of "enlargers" needed for "maximum participation" equals only one half of all farmers, those who appear likely to increase farm income capability sufficiently to form an economic unit

41 through enlargement account for a relatively small proportion of this number. This suggests only limited A,R.D.A. success in producing economic farms through enlargement and consolidation. In Dalhousie- North Sherbrooke, the proportion is only 15% of those required for "maximum participation" (3 of twenty). This suggests that, here, the programme is quite unsuitable, given the combination of local circumstances - the low capability farmland and associated low income-capability of farms, the scarcity of young farmers with high management scores, and the low proportion of those with definite plans for farm improvements. In Kitley, the corresponding proportion of 40% (8 of 20) suggests greater potential for land rationalization and formation of economic farms under A.R.D.A. This may be, to a minor extent, the result of the greater proportion of dairy farmers in Kitley, dairy farmers being . more optimistic over continuing their farm operations. To a greater extent, it appears to be simply because the combination of socio-economic circumstances are, on the whole, more suitable for A.R.D.A. farm enlargement in Kitley.-7

3. Selling

A preliminary estimate of farmers likely to sell under the .A.R.D.A. programme and benefit from

1 It is realized that test results show that farmers in Kitley (and dairy farmers) are not significantly more likely (a) to express interest in A.R.D.A. enlargement, (b) to be under age 55, or (c) to have at least $2,500 gross sales, or (d) to have management scores of at least 80 of 200, or (e) to have definite plans for farm improvement. However, there are considerably 'more farmers in Kitley with a combination of such characteristics than there are in Dalhousie-North Sherbrooke,

42 doing so, consists of those who expressed interes: in selling, whether qualified or not)-8

However, if those who stated that they mig"At either sell or enlarge, depending on circumstance3, in are excluded, then 43% (17 of 40 respondents) Dalhousie-North Sherbrooke, and 13% (5 of 39 resppn- dents) in Kitley, expressed interest in selling only.

It is assumed that farmers aged 55 or older would be unlikely to benefit from vocational training after selling their farm - because of poor health and difficulties in finding employers to of hire them. With this assumption, only 25% (10 39) 40) in Dalhousie-North Sherbrooke, and 5% (2 of in Kitley, expressed interest in selling and being under age 55, were also likely to benefit from vocational training.

Again, assume that all farmers in the stua.y area could benefit from either enlarging or selling under A.R.D.A., and that maximum success (with respect to participation) would be achieved with approximately one-half of the participants enlarging9 and one-half selling. Then, in this context, of those required as sellers, 85% (17 of 20) in Dalhousie-North Sherbrooke, and 25% (5 of 20) in Of Kitley, actually expressed interest in selling. likely these, those who were under age 55 and thus of the to benefit from retraining accounted for 50% number (i.e., 10 of 20) required for maximum . success with respect to selling in Dalhousie-North Sherbrooke, and only 10% (2 of 20) in Kitley.

8 Many qualified their answers regarding circumstances under which they would sell, and some did not express specific interest in (a) selling plus retraining plus re-establishing and, (b) selling plus retraining plus leasing the farm residence.

43 4. Overall Estimates of Those Likely to Participate Successfully in the A.R.D.A. Programme

(i) Table 14 summarizes the estimates of those likely '19 to participate successfully in the A.R.D.A. programme.

TABLE 14

Dalhousie- Kitley N.Sherbrooke

1. (a) 85% (17/20) 25% (5/20) likely to sell (i.e, expressed interest) (b) 50% (10/20) 10% (2/20) under age 55, likely to sell and to benefit from vocational training 2. (a) 5% (1/20) 25% (5/20) likely to enlarge successfully; expressed interest in enlarging, age under 55, management score at least 80/200, definite plans for farm improvement, gross sales at least $2,500

19 Estimates are expressed as % proportions of the number of participants needed for maximum success, assuming that this requires one-half to enlarge, and one-half to sell. The actual numbers of respondents are given in parenthesis.

44 Table 14 (continued)

(b) 15% (3/20) 40% (8/30) those qualifying as in estimate 2(a) above, but not expressing interest because of doubts over the risks, uncertainty, and costs of enlarging, and the lack of available farm help.

i) Dalhousie-North Sherbrooke Only one respondent, 5% of the number o enlargers required for maximum participation, expressed interest in enlarging under A.R.D.A. and appears likely to successfully do so. On the other hand, 17 respondents - a substantial 85% of the number of sellers required for maximum participation - expressed interest in selling. Ten of them, still 50% of those required, were under age 55 and thus likely to benefit, upon selling their farm, from vocational training for other employment. There was thus a high imbalance between the numbers of those interested in selling, and of those interested in and capable of enlarging. Although all prospective'candidates would be able to enlarge, only a few of those willing to sell for farm consolidation could do so (although all could sell for alternative land use if willing to accept the lower prices per acre). This limitation - the scarcity of those likely to enlarge successfully - suggests that Dalhousie- North Sherbrooke offers little potential for successful working of the present A.R.D.A- programme. As discussed later, a combination of local circumstances appear to make the programme unsuitable.

(iii) Kitley • Five respondents, 25% of the number required for maximum participation, expressed interest in

45 enlarging and also appeared capable of successfully doing so. This is considerably higher than the 5% estimate for Dalhousie-North Sherbrooke. The same number, also amounting to 25% of those required as sellers, expressed interest in selling. However, only two of these five, or 10% of those required as sellers, were also under age 55 and thus likely to benefit from vocational training. In short, unlike Dalhousie-North Sherbrooke where the limitation is the relative lack of those both interested in and capable of enlarging, in Kitley the limitation is the relative lack of those both interested in selling and capable of benefitting from vocational training. Not all prospective candidates for enlarging are likely to find available farmland for consolidation. Nevertheless, the higher proportion of respondents both •interested in, and capable. of enlarging, suggests a moderate potential for A.R.D.A. success in forming more economic farm units. In this, the programme appears more suited for conditions in Kitley than in Dalhousie-North Sherbrooke.

(1 ) Overview For Dalhousie-North Sherbrooke, the constraint of one respondent in forty likely to benefit by enlarging implies that only one additional respondent will be likely to be able to sell his farm for consolidation with the former.2° This suggests that in total, only two of forty, or 5%, may benefit from participation in the programme. If the constraint is changed to the three qualifying as likely to benefit but not necessarily expressing interest in enlarging, this suggests that still only 6 of 40, or 15%, are likely to benefit by participation.

20 It is assumed that distances between the farms involved are short enough to make consolidation feasible.

46 •••

For Kitley, the constraint of two respondents in forty interested in selling and likely to benefit from retraining implies that only another two will likely be able to enlarge, so that a total of four in forty, or 10%, are likely to benefit from participation. If the constraint is changed to the total of five respondents interested in selling, this suggests that a total of 10 in 40, or 25%, might benefit from participation.

In short, it appears that successful operation of the A.R.D.A. programme is limited (a) by a relative lack of those interested in, and capable of, enlarging in Dalhousie-North Sherbrooke, and (b) on the other hand, in Kitley, by a relative lack of . those interested in selling and likely to benefit from vocational training.

In this regard, a significantly smaller proportion of farmers in Kitley expressed interest in selling under the programme ( = 9.42), and 21 type of farm appears to be the214or factor here. Kitley has a significantly higher proportion of dairy farms (v--21df = 21.55), and dairy farmers are significantly less likely to express interest in selling under A.R.D.A. (X21df = 5'73). This is largely because of the greater optimism of dairy farmers over their chances of maintaining a viable farm operation, in turn because of milk contracts with prices specified by the Ontario Milk Marketing Board under the current governmental dairy policy.

From this, it appears that the current dairy policy may be encouraging certain farmers - who might otherwise sell their small, low income farms for consolidation, and if possible retrain for another occupation - to instead continue an uneconomic operation. To the extent that it accomplishes this,

21 Factors influencing the scarcity of those likely to enlarge successfully are discussed later.

47 the dairy policy appears to work at cross-purposes at to the A.R.D.A. programme as the latter aims correcting inefficient use of capital, land and human resources in agriculture (a) by consolidating small uneconomic farms with larger farms to produce economically viable units, and where relevant (b) by training low income farmers for occupations with higher earnings.

V. CONCLUSIONS ON SUITABILITY OF THE A.R.D.A PROGRAMME FOR THE STUDY AREA

On first examination, the A.R.D.A. programme appears suitable in its objectives and methods of implementation. However, problems of interest on the part of potential participants, and of local geographic and socio-economic circumstances, limit its suitability for the study area.

1. Enlarging Apart from the numbers interested in partici- townships pation, several factors, common to both in the studied, hinder the success of the programme low- enlargement and consolidation of small-scale, income farms into viable economic units.

(i) Age - The relatively high proportion of older), older farmers (44% of respondents were 55 or means that many would be unlikely to successfully manage an enlarged farm long enough to realize an adequate net gain from their investment in enlarging. Similarly, many would be unlikely to benefit from selling and retraining, as their age would hinder their finding satisfactory employment.

(ii) Management - Associated with the high proportion of older farmers, most farmers in the study area appear to have relatively low managerial

48 ability - in terms of management practices and efforts at farm improvement. Associated with the high proportions of both older farmers and farmers with low management scores, many showed a pessimistic outlook toward the future, lacking definite plans for farm improvement. These farmers appear to lack the progressive attitude essential to competitive farming; with continual improvement of farm income-capability, and thus appear unlikely to enlarge successfully.

(iii) Scarcity of new operators - Census data22 indicate a continual decrease in the numbEr of farms in both townships in recent decades. Ir. addition, only 28% of respondents in Kitley and 13% in Dalhousie-North Sherbrooke, had sons expected to continue the farm. With such a situation, perhaps it is not worthwhile to invest heavily in an attEmpt to establish economic agriculture in the area - particularly Dalhousie-North Sherbrooke. However, such a decision must be made within a wider rangc of considerations.

(iv) Land capability - A further hinderance is the low income capability of most farms in the study area - in terms of gross sales (52% below $2,500), and total farm value (70% below $25,000). Many respondents (317) required off-farm employment to supplement farm income for what they considered a satisfactory living standard, and more than half (56%) received less than half of their household income from the farm. From this it appears that in many cases, even if it were possible to enlarge acreage sufficiently to double farm sales, it is questionable whether this would give an economic farm

22 Number of farms: 1941 1951 1961 1966 Kitley 284 225 208 186 Dalhousie-N.Sherbrooke 256 152 133 106 (Source: Census of Canada

49 unit capable of providing a satisfactory living income.

This situation is aggravated by the low agricultural capability of most farmland in the study area - as indicated by the CanadaLand Inventory.23 Most respondents (81%) had less than one half their farm in improved condition. These small improved acreages and low capital investment in land and buildings, combined with low investment in machinery and equipment, and low levels of management, are the main cause of low farm incomes in the area.

In short, most farm operations are small- scale in economic terms (size of farm business), despite relatively large total acreages; enlarging total acreage may not significantly increase net income, particularly since most farmland that would be available for consolidation is of low capability - the higher capability land being already in the hands of the larger farmers. In many such cases, enlargement involving low capability land might not increase net farm income-capability, and in cases of low managerial ability, the costs of enlargement might exceed the increase in sales. Of course, this does not apply to those farms that do have sufficient cores of improved, higher capability land, that have managers of sufficient ability, and that have a farm business large enough to offer potential for long term success. However, it is held that very few farms in the study area meet these requirements. In most cases, enlargement is not feasible - particularly when most farmland available for consolidation is of such low capability24 that its added earning power, given the average managerial ability, would not

23 See footnote 7 for data from the Canada Land Inventory. 24 See footnote 7 for data from the Canada Land Inventory.

50 likely make the costs of enlargement worthwhile. An associated problem, particularly in the Precambrian Shield areas like Dalhousie-North Sherbrooke, is the fragmental distribution of the areas of higher capability land, a result of the physiography; th:Is further hinders development of compact, economic farms.

(v) Overview - The assumption was made earlier that for "maximum participation" one-half of all farmers would enlarge. However, as indicated above, the limitations of the land resource make it unlikely that this maximum could be achieved such that each enlarged farm would be economic. A. more realistic estimate may be that an optimum pattern of enlargement and consolidation (including shifting some land to alternative uses) would reduce the number of farms to about one-quarter of the present number in Dalhousie-North Sherbrooke, and one-third of the present number in Kitley. This would require farm enlargement on the part of one-quarter of the farmers in Dalhousie-North Sherbrooke, and one-third of those in Kitley. However, as discussed earlier, such constraints as age, management ability and interest appear likely to prevent even this level of successful participation.

In short, even given the relatively modest proportions of farms in the study area required as cores for enlargement into economic units, it appears that too few farms offer this potential. In this regard, the potential in Kitley, and the Limestone Plain, in general, appears greater than that in Dalhousie-North 'Sherbrooke and the Precambrain Shield.

2. Selling As indicated above, many of the smaller, low income farms consist largely of low capability, unimproved land, more suited to alternative land uses rather than consolidation with other farms - particularly where their tracts of higher capability land

51 are scattered and discontinuous.

Such farms tend to have low market values, reflecting their low income-capability. The prospect of a low selling price - particularly in the case of alternative land use - appears to deter many such farmers from expressing interest in selling under .A.R.D.A. (M% of all respondents). This is particularly true for those older farmers unlikely, even - after retraining, to obtain a job giving an adequate living income. Many of them appear to consider it better security to continue the farm even if it provides relatively little income, than to sell for a few thousand dollars, which may appear insufficient for an adequate living income for more than a few years.25 Even the A.R.D.A. offer to guarantee a minimum $1,200 annual income plus life-time rental of the farm residence was not considered an adequate substitute for the "income security" of the farm, and no great interest was expressed in this provision of the original program. The 1970-75 program does not contain this item because the Department of Social and Family Services can provide greater assistance of this kind.

Many farmers in any case have no intention of selling their low income farms, preferring to farm as long as possible. Moreover, such farmers often are not interested in, or not capable of, successfully 26 regional enlarging or improving their farms On the

25 However, if the farm could be sold for, say, $25,000 or more, the above attitude appears irrational; if invested at only 5%, $25,000 would give $1,250 a year to live on. Added to the assistance (e.g., rental of farmhouse) under the programme, this may give an adequate living income, while still retaining the $25,000 as security to replace that of the farm. It may make sense to increase this annual income by consuming part of the original sale price each year. 2 A substantial proportion of respondents - 307 (13 of 40) in Dalhousie-North Sherbrooke, and 537 (21 of 40) In Kitley, are interested neither in enlarging nor in selling under A,R.D.A.

52 scale, this leads to a perpetuation of low income farming, and is a major obstacle to a successful operation of the A.R.D.A. programme.27

A major problem is the number of low income farmers unlikely to successfully increase income by enlarging, and, being over 55, unlikely to benefit from retraining. These include those interested in selling - 18% of respondents (7 of 40) in Dalhousie- North Sherbrooke, and 8% (3 of 39) in Kitley, those interested in enlarging but unlikely to successfully do so - 2.5% (one respondent) for Dalhousie-North Sherbrooke and Kitley each, and those not interested either in enlarging, or in selling - 18% (7 of 40) in Dalhousie-North Sherbrooke, and 28% (11 of 3S) in Kitley.

For prospective sellers aged 55 to 65, who seemed unlikely to be able to raise their income by either selling their land or enlarging the farm, there was an offer of the A.R.D.A. guarantee of a $1,4'001 minimum annual income; if the proceeds from the farm sale are insufficient, the balance would have been received as a pension. Re-establishment problems are reduced by giving sellers either a life-time lease of the farm residence, or are-establishment grant of up to $1,000. However, this earlier level of assistance appeared inadequate in dollar terms.28 With respect to the problem of "unlocking" older farmers for their 'land, those over age 55 were asked whether they were interested in selling if the A.R.D.A. programme were modified so that they received not only a life-time lease of their farm residence, but also an early retirement pension of unspecified amount, instead of vocational training. Results were as follows:

27 In turn, this raises the question of whether some form of semi-compulsory farm consolidation plus alternative land use programme should be considered - such as obtaining options to buy certain farms. 28 The "mobility grant" currently can be as high as $2,500 to help cover expenses of re-locating a farm or moving to another area to live.

53 (1) of 32 respondents over 55, five (16%) expressed interest, with 4 of 18 for Dalhousie-North Sherbrooke and 1 of 14 for Kitley. (2) of 16 respondents aged 55 to 65 only one (in Dalhousie-North Sherbrooke) expressed interest. (3) of 16 respondents over 65, 4 (25%) expressed interest, with 3 of 9 for Dalhousie-North Sherbrooke and 1 of 7 for Kitley.

Only small proportions of older farmers appeared interested - although interest among those over age 65, and in Dalhousie-North Sherbrooke, was slightly higher.29 This suggests that such a modi- fication of the programme would do little to solve the problem.

Another problem results from the 20% in Dalhousie-North Sherbrooke (8 of 40 respondents) and 25% in Kitley (10 of 40) under age 55 and not interested in either enlarging or selling. Many were not interested in training for non-farm occupations or were doubtful that this would give higher incomes. Many - particularly full-time farmers - may be mistaken in thinking this way. On the other hand, most part-time farmers - 84% (15 of 18) in Dalhousie- North Sherbrooke, and 77% (10 of 13) in Kitley - maintained a "satisfactory" living standard on their combined farm plus employment incomes. As a result, most of this group expressed plans to retain their "status quo", preferring this to the risk of invest- ing in enlargement to increase farm income-capability until off-farm employment is unneeded, and preferring 'farming as an occupation to retraining for a non-farm occupation. For these farmers, the present programme is not suitable.

29 However, in both cases, the small number of observations prevented Chi square testing for significant differences in the proportions expressing interest.

54 As stated earlier, the relative importance of farm and off-farm incomes is not significant in influencing either plans for farm improvement or attitudes and interest toward the A.R.D.A. programme. In particular, part-time farmers are neither more nor less likely than full-time farmers to express intcrest either in enlarging or in selling plus retraining.

However, the presence of off-farm employment is important to those who sell under A.R.D.A., in that it gives them an advantage - if not in gaining a full-time job, at least in adjusting to the non- farm occupation. Among older farmers who sell, those with off-farm employment may have less difficulty in finding employment to replace the farm income. Despite this, only 30% of the part-time farmers (3 of 27) expressed intentions of changing completely to non-farm occupations. Thus, to the remaining 70%, the retraining programme is hardly relevant. Nos: part-time farmers, significantly more so than full- time farmers, were satisfied with their present income and living standard - and willing to retata their present status. This is supported by findi-ags of J.R. Carpenter (1962)30 and H.F. Noble (1965)31-, that in eastern Ontario, average incomes of part- time farmers were about one-third higher than tho3e of full-time farmers.

30 Carpenter, "Sources of Incomes of Open• Country Residents in the Tweed Forest District", Unpublished M.S.A. Thesis, U. of Toronto, July 1962, p. 59. Annual net income averaged $3,016 for part-time farmers, and only $2,155 for full- time farmers,(sample of 466 farms). 31 H.F. Noble, Variations in Farm Income of Farms in Eastern Ontario by Farm Type and Farm Class - Farm Economics, Co-operatives and Statistics Board, Ontario Dept. of Agriculture and Food, Toronto, 1966, p. 10. Annual family living income averaged $3,433 for part-time farmers, but only $2,428 for full-time farmers (sample of 299 farms).

55 3. Conclusion As shown, it appears likely that very few economic farms would be established in the study area under the current A.R.D.A. programme of farm enlargement and consolidation. The main limitations are the land resource base and the socio-economic characteristics and interest of the farmers. In Kitley, there is a relative lack of interest in selling farms for consolidation; in Dalhousie-North Sherbrooke, there is a relative over-abundance of those interested in selling. In both townships, particularly Dalhousie-North Sherbrooke, few farmers are both interested in, and capable of, enlarging. This is largely the result of a scarcity (a) of young farmers, (b) of those with the necessary managerial attitude and ability, and (c) of those with present income-capabilities large enough to provide a core for an economic unit after enlargement. More important is the scarcity of farmers who combine the above qualifications. In addition, the low agricultural capability of most farmland, in most cases, makes enlargement feasible.

Given its objectives and methods of implementation, the A.R.D.A. programme appears more suitable for a region containing a substantial number of younger farmers (preferably under 45), with reasonably high managerial ability and progressive managerial attitude, and with farms of sufficient income-capability to provide the basis for economic enlargement. This last condition implies a region of at least moderate .agricultural land capability, with sufficient numbers, firstly of marginal or above-,marginal farms which could benefit by enlargement, and secondly, of smaller, low-income or sub-marginal farms available for consolidation. Substantial areas of south- western Ontario appear likely to satisfy the above conditions. Nevertheless, the early A.R.D.A. decision was to direct funds for implementation of the programme to eastern Ontario, where A.R.D.A.

56 32 research (LP. Noble, 1966) suggested that the low income farm problemis most acute. However, as outlined above, it appears that the programme coald achieve more success in creating economic farms •by consolidation and enlargement in an area offering greater potential.

In sum, the data available suggest that in the study area - particularly in Dalhousie-North Sherbrooke and the Precambrian Shield, (a) there is a considerable low income farm problem toward which .A.R.D.A. should give specific regional attention, but that (b) there is relatively little scope for the present programme to resolve the problem through creation of farms of economic size by enlargement and consolidation. Resultantly, it may be worthwhile to give some consideration to more comprehensive programmes of assistance. Such programmes would have a definite regional focus, consider both ncn- farm and farm households, and include a full integration of farm enlargement and consolidation,

32 These studies (H.F. Noble, op.cit.), involving a 299 farm sample, suggest that only 29% of all farms in the eleven county region of Eastern Ontario are Class A - with at least the equivalent of 130 acres of Capability Class 1 farmland, and giving $3,000-$4,000 net farm income. The remaining 71%, not qualifying as Class A farms, are considered uneconomic and inadequate to supply an adequate living income, and should be involved in an enlargement and consolidation programme. While it was realized that there was need for such a programme throughout Ontario, it was decided that in Eastern Ontario, the rate of farm adjustment by enlargement and consolidation was slow enough, relative to other areas, to deserve first attention.

57 alternative land use, vocation retraining, rehabilitation .and re-establishment, and other forms of assistance such as was provided for under Parts V and VI of the 1965 Federal-Provincial Agreement and now provided by other agencies such as Federal Department of Regional Economic Expansion and Ontario Department of Treasury and Economics. It is not proposed here that such a programme be devised and implemented, but that research on its feasibility should be undertaken. - This would involve a social cost-benefit approach, (particularly considering the social opportunity cost of not having the programme). Social values are deeply involved here - such as the desires of many farmers to continue their way of life, and the policy implications therein. Finally, this approach must consider whether or not there should be, and can be, a viable agriculture in the study area and whether other resource-using activities can replace agriculture as a source of income.

To conclude,

(a) socio-economic and geographic circumstances limit the chances of effective establishment of a substantial number of economic farms in the study area of Eastern Ontario - particularly in Dalhousie-North Sherbrooke and neighbouring areas in the Precambrian Shield.

(b) because of these circumstances, it appears that a more comprehensive form of A,R.D.A. assistance may be more effective in solving the law income farm problem in the study area.

(c) on the other hand, the current A.R.D.A. programme should achieve considerable success, in creating a significant number of economic farms by enlargement and consolidation, in other areas where there are (a) more higher-capability farmland (b) more younger farmers who are skilled, enthusiastic managers, and (c) resultantly more farms of sufficient income-capability to become cores for successful enlargement.

58 SELECTED BIBLIOGRAPHY

Buckley, Helen and Tihanyi, Eva. Canadian Policies for Rural Adjustment. A study of the Economic Impact of A.R.D.A., P.F.R.A., and M.M.R.A., Canadian Centre for Community Studies, Special Study No. 7, Economic Council of Canada, Queen's Printer, Ottawa, 1967.

Canada Department of Forestry, Agricultural and Rural Development Act, Annual Report, 1965-1966. Queen's Printer, Ottawa, 1966.

Canada Department of Forestry, A.R.D.A. Federal- Provincial Rural Development Agreement 1)65- 70, Queen's Printer, Ottawa, 1965.

Canada Department of Forestry, Soil Capbility Classi- fication for Agriculture, Canada Land Inventory, A.R.D.A. Report NO. 2, Queen's Printer, Dttawa, 1965.

Canada Department of Forestry, Proceedings of the Federal-Provincial Conference on Farm ' Enlargement and Consolidation, Ottawa, January 1966.

Canada Land Inventory, Soil Capability for Agricul- ture (maps), Kingston (31C), Ogdensburg (31B), Ottawa (31G), Pembroke (31F), Queens Printer, Ottawa 1966.

Carpenter, Raymond J., "Sources of Incomes of Open County Residents in the Tweed Forest District, Ontario". Unpublished M.S.A. thesis, Univer- sity of Toronto, 1962.

Gilchrist, V. "A Pilot Study of Income Alternatives Affecting the Movement -of Farm Operators out of Agriculture", C.J.A.E., Vol. IX, No. 1, 1963, pps. 9-22.

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