The Future for Agriculture – The Path Forward

 

The agricultural industry needs its support infrastructure, specifically government and government agencies, to return to the grass roots of the industry.

The industry desperately needs a predominate base of professional Western Canadian origin and educated, farm background, farm experienced staff and management. We need professional people with “skin in the game” who understand their fiduciary responsibilities to the industry they are involved in. Simply put, we need people with ‘shit on their boots and chaff in their pant cuffs’.

We need personnel who are endowed with practical industry knowledge and experience with industry common sense over PhD’s who often lack all these elements.

We need personnel with empathy for industry gained through first-hand experience and knowledge of industry that possess industry leadership and mentorship skills and abilities. Individuals who understand the sociology and psychology of the rural farm community and the people who are the backbone of the agricultural industry.

Bachelor of Science and Master of Science University Agriculture Degrees have served many of us with the necessary skills, knowledge and abilities to carry out these roles and responsibilities. This is NOT to suggest that PhD’s cannot be additive but rather to raise the issue of the numerous employees with PhD’s and in some cases multiple PhD’s that completely lack practical industry knowledge and experience with industry common sense; that have no empathy or sense of fiduciary responsibility to the industry including any direct connection with Canadian agriculture.

The agricultural industry needs agricultural policy and programs NOT political policy and programs that suit or satisfy some ideology unconnected to the agricultural industry.

This requires policy and programs with clearly stated and measurable agricultural objectives and agricultural deliverables. What is the objective, what are the deliverables, how will we know when they have been achieved and who decides on these?

The industry absolutely requires a clear definition of Agriculture across all policies and programs including all the related legislation that is consistent with Federal definitions and legislation.

An example is Bill 17 wherein greenhouses, nursery, sod and mushroom farms are specifically excluded as primary agricultural industries for the purposes of Bill 17 YET Agrastability – a Federal/Provincial program available only to primary agricultural producers producing eligible/specified primary agricultural products are eligible. All the products produced by the Bill 17 excluded industries are specifically listed as eligible products in Agrastability.

Numerous Federal including CFIA agencies and legislation, specifically reference and have regulations specific to these excluded industries.

Meanwhile, AFSC policy is that Greenhouse bedding plants/annuals, flowers, etc. are agribusiness not agriculture but if the same operation produces vegetables or fruits it is then agriculture. This edible horticulture versus non-edible horticulture debate and issue was settle 20 years ago at the federal/provincial safety net committee table.

The UPC proposed amendments/replacement of Bill 6 will hopefully address issues such as this.

The agricultural industry needs a workable definition of a Small Farm. Reference to a number, for example 3 or 5 employees is too vague. Are these 3 or 5 full-time positions or the equivalent of 3 or 5 full-time positions? Does it allow an operation that requires, for example 9 employees for 4 months to be defined as a small farm?

Local Food Initiative – Shop Local – Locally Grown: all elements much be consistent. A drastically improved/enhanced understanding of small farms and the business models that can be the backbone of this initiative are imperative. The staff and management of the numerous related entities involved such as Health, Farmers Markets, AFSC, Alberta Agriculture must be competent and knowledgeable not only as to physical production elements but also as to the sound economic/business risk management backgrounds and knowledge required to make these operations and initiative successful.

Again, sound science based academic backgrounds combined with practical farm knowledge and experience are essential. We do not need bankers and others who have no economics, no finance, no risk management academic backgrounds and most importantly, no practical experience or knowledge. As one individual advised me “The bank tells me everything I need to know”.

Exemptions such as those negotiated by the Alberta Greenhouse Growers Association with respect to labour and carbon tax which are available only to the Association’s members as well as Bill 17 overall, are discriminatory.

Bill 17 has been previously addressed with respect to the specific exclusions of primary agricultural sectors such as greenhouses. Given that this is Provincial legislation that is inconsistent with Federal legislation with respect to definitions, I submit that Bill 17 is fundamentally an illegal piece of legislation. It also opens the door to an extremely slippery slope with respect to Municipal Affairs wherein the farm assessment rules could easily be amended to also exclude these sectors from farm assessment rules.

Farm Fuel rules and program needs updated. Natural gas is to a greenhouse, livestock barns, and grain drying what diesel fuel and gas are to grains and oilseeds and livestock feed related activities. Natural gas needs the same exemptions and treatment as diesel and gasoline – exempt from carbon tax at source.

University of Alberta Faculty of Agriculture needs to return to its roots. Focus on Canadian and Specifically Western Canadian students and research – research that is peer reviewed and can form the backbone of defense and support for responding to the anti-agriculture sentiments and movement.

It would not be unreasonable to impose a requirement that 95% of the undergraduate student positions and 90% of the graduate student positions MUST be for Canadian students. The Faculty needs to re-establish and/or emphasize departments such as animal science, plant science, soil science, and farm/business management.

If we are to have available the people to staff the government ministry of agriculture and AFSC with skin in the game, knowledgeable, experienced, common sense people that the industry deserves; we must first provide the infrastructure and environment within which to educate and develop these individuals.

Bring back the basics – production economics including marketing, agricultural policy, agricultural risk management, agricultural finance taught by professors with skin in the game and practical farm experience and knowledge who can provide a practical basis and focus to the courses, the majors and the research.

Safety Nets:

Crop Insurance as a production-based coverage model is outdated and does not really address industry needs. The program is too complicated and administratively complex. The Global Agricultural Risk model is more applicable.

The most fundamental business risk requirement is to protect and maintain the farms gross margin. Therefore, a gross margin insurance (GMI) strategy is the inherent industry need.

The only element of existing crop insurance that has validity is the spot hail insurance.

Production based crop insurance, spring price endorsement and all the insured value and probable yield methodologies and calculations can be eliminated with a GMI model.

A GMI model is easily re-insured and will also eliminate the need for Agrastability. GMI can easily be applied to any farm, any crop, or any diversified combination of crops and livestock operation. Administratively, GMI can be largely incorporated into the filing of the required annual income tax return.

Insured values, probable yields, individual farm variability, per acre coverage, etc. information is all inherent in a GMI model. The GMI model gives full credit to the individual’s marketing skills, use of hedging account/trading account expertise, direct marketing, production expertise and efficiencies. These elements are all inherent in the individuals’ gross margin.

Year-to-year variability within the farm operation and between farm operations can be assessed as well as between years variability. The systemic (not controllable) and non-systemic (controllable) risks facing the industry and individual farms are all accounted for in the specific farm’s gross margin.

A very similar concept was introduced in the BC Tree Fruit Industry Crop Insurance program twenty years ago when the Grower Price Index (GPI) was put in place. It succinctly accounted for all the variety, planting, management and quality issues involved in determining individual insured values. Simply put, GPI by calculating the individual’s average price and comparing it to the industry average price determined each individuals relative performance to the industry making insured values simple to determine.

To make a GMI model efficient to deliver and administer, it would require that all of agriculture utilize accrual accounting and tax filing. Accrual methodology properly addresses issues that AgraStability currently struggles with.

Trade Issues:

China is a major issue with Canadian and even world agriculture. Trade with China is basically a political football. The state is the party and the party Is the state. “Silent Invasion” is an excellent readily available (albeit with respect to Australia) book that details the “art” of the Communist Party of China and its overall objectives.

Canola, pork, beef and even wheat trade are often at the whims of China actions. As it is and as it has been for many years, China knows it controls the North American commodity markets – specifically canola, China knows it totally controls it. Corn, Soybeans and wheat are also largely under China’s thumb. Stop buying, reject a few cargoes, create some issue and the markets immediately respond. Buy low is underlying premise.

We must diversify our markets and stop focusing on single or limited large export markets.

China has imposed state decreed orders to suspend imports of United States agricultural products as of August 5, 2019. Similar orders exist with respect to Canadian canola, pork and beef by means of contrived issues with respect to quality and/or health papers, etc.

We must also address interprovincial trade barriers. We should be trading within our own country first.

Urban and Other Anti-Agricultural movement and sentiments have become critical barriers.

Agriculture needs its own War Room to immediately and directly address these issues.

Plant based replacement for meat, anti-meat, anti cow movements, anti-glyphosate, environmental fear mongering, PETA, and Calgary Stampede (Rodeo) are but a start to the list of issues that need countered and the public presented with fact and logic.

The Canada Food Guide is an issue to agriculture in and of itself.

 

Environment:

Agriculture is essentially a solar powered (renewable resource) industry wherein plants convert photons from the sun into energy (photosynthesis) to produce plant mass. The plant absorbs sunlight (photons), consumes CO2, water and minerals to produce oxygen and sugars.

Agriculture overall, contributes to environmental conservation/stability. Yes, there are issues to be addressed but overall, agriculture is a positive environmental contributor.

Carbon taxes penalizes industry already highly efficient and environmentally responsible and highly aware of and innovative with respect to soil productivity.

On August 5, 2019, a news report prominently presented the “Intergovernmental Panel on Climate Change (IPCC) report “Must Change Food Production to Save World”. Meanwhile, According to newly published research by Glatzle, who has written over 100 scientific papers and two textbooks, “There is no scientific evidence, whatsoever, that domestic livestock could represent a risk for the Earth’s climate.”

More reasons that the Agricultural industry must put in place its’ own War Room to get facts to the public and counter the hype of the moment and sensationalized ideologies.

A great place to start is in the classrooms of our schools. An Agriculture In the Classroom movement needs to be mandatory – a part of social studies and science from the early grades. Why not use our valuable Agricultural graduates to deliver this message? Maybe agriculture needs to establish a cross-faculty relationship with Education such that an Aggie would also be an Education graduate and be able to teach in our school system. Many Aggies could be science teachers as well as agriculture.

Education provides for a business teaching major – why not something similar?

About the Author:

The foregoing are the musings, pontification’s, and opinions of myself. I assume all responsibility for these. They are based on a life-time of farm and farm industry involvement and professional employment and involvement in the agriculture industry which is near and dear to me. My great-grandfather came to Alberta from South Dakota in September of 1900 to homestead south of Erskine. The descendants of the oldest son (12 years old in 1900) still farm there including the original homestead.

Wayne and Carolyn Lohr own and operate Lohr-A-Lee Greenhouses near Olds, Alberta.

Wayne is a BSc (77) and MSc (89) U of Alberta Agricultural Economics graduate while Carolyn is a U of Alberta BSc (78) Agriculture Plant Science Horticulture major graduate.

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