With strong farm incomes in the last two years, Canada’s farmers are moving ahead of their cousins who chose the city's bright lights
Canadian farm families aren’t just catching up to other Canadians these days. More and more, they’re pulling ahead.
Of course, it’s as hard as ever to generalize about agriculture. There are differences between sectors, there are differnces between regions, and most importantly, there are differences between age groups.
Even so, it looks like it’s time to park the old stereotypes.
For instance, back in Dad and Grandpa’s day, when you said you were from the farm, it raised a picture of a family that prized lifestyle over money. Farm families were generally pictured as borderline disadvantaged. At school, there were jokes about no electricity or indoor plumbing, and there was a general assumption that being from the farm meant you had less access to modern amenities as well as to recreational and educational opportunities and the like.
Read Also
Riding the tariff rollercoaster
Farmers are accustomed to roller-coaster years. But the current geopolitical windstorm is something else entirely. On his cattle operation near…
It was a big enough problem that rural sociologists and agricultural economists had a special term for it — the “farm problem” — and in the 1940s through the early ’60s they spilled barrels of ink writing about it.
But then things slowly began to change. Rural areas began to arrive on the electrical and telephone grids. Roads got better and vehicles more reliable. Today, outside of a few minor issues, says one agricultural economist, you’d be hard pressed to tell the difference in experiences or opportunities between a farm family and urbanites.
Al Mussell, a researcher with the Guelph, Ont. based George Morris Centre, lives in a rural and predominantly agricultural area, and says that today a farmer can be standing in the middle of one of his fields, whip out his Smartphone, search the Internet for the most obscure fact and shoot off an email to get further clarification. It’s so far removed from the isolated old days of party lines and snail mail as to be almost unrecognizable.
It’s not that life on the farm isn’t without its own difficulties — hockey rinks are a long drive away, and hospitals even further. But long gone are the days when Uncle Frank had to drop out of school in Grade 8 because there wasn’t bus service to the local high school and he couldn’t afford to rent accommodations in town.
These days the costs of farming are going down, at least in relation to small towns, and today the costs mainly amount to a bit more time on the road. There are other costs, of course. Rural depopulation makes it harder to form neighbourhood social networks, but that’s true in town too, and in both cases it can be at least partly compensated for by today’s electronic communications.
“At the end of the day what we’re talking about is all generally small stuff — inconveniences,” Mussell says. “It’s not going to condemn my kids, or my neighbours’ kids, to a life where they don’t have the same opportunities as everyone else. That was not always the case.”
It begs the question — if today’s farm families aren’t the supposed backwater hicks of yore, where do they fit in Canadian society? To use an economist’s jargon, what is their socio-economic status?
If the numbers are to be believed, farmers’ status is getting better by the year, while other Canadians stagnate or even lose ground.
Incomes diverging
Last month, two very different sets of headlines appeared almost simultaneously in Canada’s newspapers. The first said “Farm income rises” and the story went on to quote the latest farm income report from Statistics Canada.
The second headline offered a more subdued “Wages failing to match inflation” and the story cited another StatsCan report on Canadian payrolls.
Boiling the numbers down, what the two reports essentially found was a tale of two solitudes. Canadian farmers were seeing double-digit growth in their incomes, StatsCan said. At the same time, working Canadians weren’t even holding their own any more and there was some evidence that real wages — actual dollars earned, not inflation adjusted — may be poised to fall for the first time in many years.
The farm trend might be a newish one, depending on the sector. Grain growers struggled through a long period of stagnation in the 1980s and most of the 1990s before really getting some wind in their sails over the past four years. But the national trend is a long-established one, according to a labour economist that many Canadian capitalists love to hate.
Jim Stanford, an economist with the Canadian Autoworkers, says that there’s been no increase in nominal wages in Canada — wages adjusted for inflation that is — since 1979. There are a number of reasons for that, Stanford says, led by increased competition from manufacturing in low-wage centres like India and China.
Stanford sees something more structural at play. He says the squeeze on the middle class is proof that the social contract that was forged in Great Depression and Second World War has been disappearing, even in sectors that aren’t grappling with global competition.
“I’m not sure that employers ever really wanted to sign that contract. Circumstances forced them to,” Stanford says. “Since about 1980 we’ve seen it being rolled back again and again.”
Whatever theory you use to explain it, the upshot is that a group of working Canadians are just hanging on by their fingernails in the face of forces that most economists say are almost completely beyond their control.
To illustrate that point Stanford cites the newest chapter in the story of Ford, sometimes credited with making a major contribution to the growth of the middle class in North America by paying wages that were high enough that the guys on the line could actually dream of buying the cars they were producing.
“Look at Ford today — the new assembly line worker at Ford is starting at $15 an hour, and Ford is the company that everyone says the others should be more like,” Stanford says. “I would say that at $15 an hour, not very many are going to be able to buy a new Ford.”
The professionals
At this point, a free-market economist is sure to pop up and say that while it’s true that low-skill jobs are under the gun, it’s just part of a movement to a knowledge economy that will reward people for their education and abilities.
If the assembly line worker at Ford is the loser, in other words, other categories are winners. Indeed, for the workers that do have those skills and credentials, not only are their lives better because their wages are growing, but also because cheaper goods and services give them more spending power.
Pete Holle heads up the Winnipeg-based Frontier Centre for Public Policy, a Libertarian-leaning think tank that examines questions of public policy. He and his colleagues have another less flattering term for this trend — credentialism.
Holle says the growth in the number of jobs that require a credential and membership in some sort of organization has been growing rapidly since the 1960s when just five per cent of all jobs required one. Today that’s become more than 20 per cent.
It’s hardly surprising. Credentialing limits the number of people who can get into a job or profession, which in turns does good things for the wages of the anointed few.
Various groups have taken note of this trend and there’s been a movement towards “professional” status by groups as diverse as insurance adjusters and public relations practitioners. But Holle cautions that the ride may be coming to an end, and he says that the same Internet that allows farmers to look up answers in a remote field also likely means increased competition for many professionals.
“We’re increasingly seeing things like medical images that are being sent to lower-wage jurisdictions like India, over the Internet, for analysis,” Holle says. “Even those skilled jobs can be outsourced.”
Nor is that the only threat for this sector. The jobs that can’t be physically outsourced to another jurisdiction may be outsourced to another domestic group, Holle says. He gives the example of a minor cut that requires a trip to an emergency room where a physician will clean it, stitch it up and apply a tetanus shot.
“We’re not talking about something terribly complex here — do you really need a full-fledged doctor and an emergency room to handle it?” he asks. “Or would we all be better off if we could go to a small privately run clinic in a local strip mall, where a technician who’s been trained to handle exactly these sorts of things takes care of us and refers us for further treatment if warranted?”
Given the expected pressure on the public purse from an aging population, Holle says he suspects it’s just a matter of time before some hard conversations start to happen.
Either way Holle says he has little doubt that what we’re really talking about is the disruptive power of the Internet, where it’s all but impossible to limit access to knowledge, information and even goods and services.
“I think of my kids and how they’re used to finding what they want, when they want it on the Internet,” Holle says. “If you were to try to tell them that you’ll only get the services we want to offer and you can’t get the same things that are being offered over there — well, they wouldn’t be very happy about it.”
As this new generation of wired citizens gets older and wields more power, expect things to change even more quickly, Holle says.
From the opposite end of the political spectrum, Holle finds some surprising support for this worldview from Jim Stanford, who says he suspects it really is just a matter of time before middle class professionals in their quasi-unions feel some of the wrath of falling wages. He even reaches into the world of agriculture for something he says is a better analogy than a professional union.
“I call it supply management for accountants,” Stanford says, and then chuckles.
The main point appears to be a growing consensus, across the political spectrum, that the days of the professional sitting in the sweet spot of the economy appear to be drawing to a close.
A farmer’s place
So should Canadian farmers let out a self-satisfied sigh that their day is finally coming? While most farmers don’t control the price of their products, there appears to be plenty of evidence that ag commodities are firmly in a steady upward trend, albeit with an occasional retrenchment. And while individual farms may face challenges, it’s a sector as a whole that can’t be outsourced — land is where it is. And the new technology of a farm may actually make life just a bit easier for the farmer of tomorrow, lowering the skill bar for field labour as more and more automation appears.
Yes and no, says George Morris’s Al Mussel. Farmers are enjoying relatively good times, he agrees, but he also cautions not to read too much into headline numbers, since they’re muddy at best. For example, he points out that the StatsCan farm income report only provides averages that encompass the largest and smallest farms alike, across all sectors.
In fact, he and his colleagues at the George Morris Centre feel so strongly that the complexities of the issue of farm income need to be recognized that they’ve jointly authored a lengthy report on it. In Understanding the Structure of Canadian Farm Incomes, they’ve detailed many of the issues that need to be addressed to get a clear picture of farm income in Canada.
For example, they illustrate that farm income can vary greatly within sectors, and that good times for one ag sector can mean hard times for others — such as higher grain prices that are good for grain growers but put the squeeze on livestock producers.But they also detail that in many ways, farm wealth may be under-calculated, because farm income is only a small part of the picture. To really drill into the numbers, you need to look at a combination of income and accumulated wealth. For farmers that largely means the increasing value of the assets of their operations, Mussell says.
“In this way, farming really is a bit different than any other business,” Mussell says. “In other businesses you’d be looking at the value of the business itself — the products, the customer base, the marketing plan. In farming you’re really talking about the value of the assets — what you’d get if you ceased operations and sold out.”
Even there, it’s tough to calculate some of the factors that go into determining those values. For example what about the effect of farm income support programs — don’t they almost immediately get capitalized into things like higher land prices? The answer is fairly unequivocal, Mussell says.
“I think there’s been plenty of evidence over the years that, yes, programs are capitalized quite quickly,” Mussell says.
So if things are tough all over — and getting tougher if economic forecasts are to be believed — what does that mean for farmers? Can they expect to see programs like AgriStability or supply management fall out of favour with hard-pressed taxpayers? Perhaps, but here again an unexpected voice shows that support for farmers may run deeper than most appreciate.
Detailing some of the economic challenges for workers going forward, the CAW’s Jim Stanford paused a bit to consider the reality of the Canadian farmer and ventured to offer an opinion.
“Farming is a bit different — it seems to be a really brutal business,” he says.
So does that mean that soon we’ll all be linking arms and singing Kumbaya? Not likely. There’s always that old gremlin human nature to take into account for. So that loudmouth at the curling rink who thinks farmers work four months of the year and go to Arizona for the winter is probably always going to be around.
But then again, farmers can and do play that game too — say an apple producer or a grain and oilseed farmer who complained about autoworkers during the 2008 bailout, likely without ever having met one. It’s just the way of the world, says Mussell.
“That’s human nature — to think that someone else has it better, especially if you’re facing challenges,” Mussell says. “I don’t think we’re going to be able to do much about that.” CG
