Issue:
Agriculture in Canada is facing serious income shortfalls, with negative net incomes in 2005 for the first time in history. Agriculture is a high-risk business. Notwithstanding that good management is a prerequisite for success, a majority of the factors determining receipts and input costs are beyond a farmer's control. Variables such as unpredictable weather conditions, fluctuations in market prices, and government support to competing farmers in other countries are a few examples. These factors severely undermine the ability of Canadian farmers to compete effectively. A priority must be to provide Canadian agriculture with the tools to create a stable and healthy agriculture environment. In order for farmers to continue investing and expanding their farming operations, they need financial stability and adequate tools to offset the risks tied to agriculture.

The economy of Ontario is rapidly losing one of its major contributors, that being the agricultural industry. The overall outlook for future growth and development is at its lowest level and the average age of today’s agricultural worker is in the mid fifties. Many of these individuals are seeking ways and means of either retiring or moving on into some other line of work.
Both levels of Government must be committed to strategic investment in agriculture, investment that reflects immediate need in the agricultural industry, as well as addressing long-term need to further the industry's ongoing goals and objectives.

Background:

A healthy agricultural economy means an overall healthy economy for Ontario. In the Canadian Senate’s interim report called ‘Understanding Freefall: The Challenge of the Rural Poor’, the rural poor have rarely been the subject of political attention. It is time for that situation to change since poverty in rural Ontario spills over into urban areas and weakens the overall economy of the province. This reality is manifested in the fact that the migration of youth and business from rural Ontario to our urban centres creates expensive consequences, ones that most small rural communities are unable to deal with. As examples, we consider the infrastructure, transportation and social problems we witness in the news every day. In its 2006 report, the Organization for Economic Co-operation and Development (OECD) provides additional supporting evidence such as the “vicious cycle of a poor agricultural economy leading to rural migration which leads to low population density, lack of critical mass for infrastructure and services, low or declining rates of business creation and fewer jobs”. These outcomes weaken the remaining farm operations and the cycle continues with little in the way of hope for improvement. Ontario farmers have readily adopted technological advances – something that has put agriculture at the forefront of productivity compared to other industries. In making this point we wish to encourage increased investment in agricultural research because in reality, the province has reduced public investment in agricultural research by 30 per cent in the past 10 years. The province needs to return investment in agricultural research to an earlier level of $90 million per year.
We agree that Ontario’s future prosperity depends largely on its ability to continue to adapt, innovate and strengthen its competitive advantage.
Primary agriculture is an essential integral component of Provincial
rural economics in particular and of Provincial urban economies in general.
Provincial primary agricultural producers are the foundation for sustainable communities across the Province.
Canada, which was once considered “the breadbasket of the world’ is now in actual risk of losing our secure domestic food supply and becoming dependent upon imported foods.
Canadian farmers have experienced an unprecedented financial crisis which jeopardizes the future of family farms and the greater related agricultural industry throughout the country.

RECOMMENDATIONS:

The Ontario Chamber of Commerce will urge the Government of Ontario to:
1.
Recognize that the Ontario Government is the best organization to distribute accordingly Federal & Provincial dollars in consultation with agricultural organizations such as the Ontario Federation of Agriculture and commodity organizations.
2.
Make ‘strategic investments to strengthen Ontario’s economic advantage.’ Many of these investments need to be made in agriculture and the province’s rural economic development initiatives.
3.
Encourage increased investment in agricultural research because in reality, the province has reduced public investment in agricultural research. The 99
province needs to return investment in agricultural research to an earlier level of $90 million per year.
4.
Examine investment in viable risk management and income support programs based on the model developed by the industry; provide an immediate down payment on long-term programs to provide assistance for the millions of dollars lost by grains, oilseeds, horticultural and livestock producers on their 2005 and 2006 sales; develop production insurance products for livestock and horticultural crops; and develop a federal and provincial program to buy out Ontario’s tobacco growers.
5.
In cooperation with the federal government, correct service delivery problems with Agricorp; update the compensation schedule for damage done by wildlife to livestock, poultry, crops and farm infrastructure; extend the Land Transfer Tax to include all family farms in farm corporations and estate trusts; and improve energy pricing and production situations related to farms.
6.
Recognize the diversity of Ontario agriculture requires strategic investments, preferably in the form of bankable, long-term programs, but, if necessary, as an investment that strategically compliments the federal initiative.