Ottawa-Farmers across Canada are facing tremendous pressure on their farm financial and mental health, says the Canadian Federation of Agriculture (CFA) which is offering 18 recommendations for helping them cope and support the next generation of producers.

The recommendations cover managing rising costs of production, improving risk management and reducing regulatory and tax burdens that impair their competitiveness along with promoting stable and sustainable growth and supporting new farmers.

Extreme climate episodes, the war in Ukraine and the Covid-19 pandemic are among the events that have weighed heavily on producers in recent years as they coped with dramatic increases in the cost of critical farm inputs such as fuel, fertilizer, feed, machinery, pesticides, land and labour. In addition, there were high inflation and interest rates and a price on carbon for essential farming activities, for which farmers have no viable alternatives, CFA said.

Despite these challenges, farmers produced $36.3 billion worth of products or 1.8 per cent of Canada’s Gross Domestic Product and supported 249,900 jobs across the country. Most producers “managed to stay afloat, largely due to high commodity prices and farm cash receipts that increased 14.6 per cent over 2021 levels.”

However, the financial pressures facing farmers are beginning to take a serious toll on their operating margins. “Recent numbers from Statistics Canada have shown that the net income for Canadian farmers fell 5.9 per cent in 2022 because the growth in expenses outpaced the rise in farm income and total farm operating expenses after rebates increased by 19.9 per cent in 2022, the largest gain since 1979.”

Also, farmers across the country “are experiencing an increasing series of extreme weather events that are testing the limits and effectiveness of Canada’s suite of risk management programs.

“Canadian farmers play a crucial role in sustaining our rural communities, as stewards of our natural environment and in meeting our national and international food security needs.” CFA’s recommendations are aimed at ensuring Canada’s farmers have the flexibility and tools they need to weather the current financial climate and support the transition to a low emissions economy.

Producers need access to tools and programs that will help them manage costs and price fluctuations during the year. In particular, the Advance Payments Program gives producers access to credit through cash advances based on the value of their agricultural products which helps producers meet their immediate financial obligations while marketing their products when they can get higher prices.

To help with higher production costs, CFA wants natural gas and propane used on farms to be exempt from the carbon tax, a Critical Farm Input Strategy to be developed, make the Advanced Payments Program more accessible and responsive to higher costs and allow farmers to fully depreciate farm equipment in their first year.

CFA offered four recommendations for managing production cost increases and eight recommendations to improve risk management programs and reduce regulatory and tax burdens that restrict competitiveness. There are three recommendations for promoting stable and sustainable growth and three for supporting new entrants and young farmers.

Agricultural policies and programs must be grounded in a holistic approach to sustainability that addresses environmental objectives as well as social and economic goals. “Without financial sustainability farmers cannot continue their operations, which would make any environmental initiatives impossible to implement.”

This news item prepared for National Newswatch