Lawrence Solomon
National Post
April 6, 2001

Here is the reality of modern agriculture. For every $1 of profit a Canadian farmer makes, taxpayers provide $3.55 in subsidies. In the case of Ontario farmers, taxpayers kick in $6.20 in subsidies. That “very nice living for the farmer” that the George Morris Centre touts for the large-scale farmer is not an honest living. The only reliable economy of size in modern agriculture comes from harvesting subsidies.

Big-is-beautiful advocates like those at the Morris Centre — disdaining the small farmer and dreaming of industrialized agriculture powered by mighty machines — have successfully convinced governments to subsidize large-scale practices. Their experiments at industrial and social engineering — despite decades of attempts — have all failed to be economic. The reason? Large-scale monoculture farming is inherently risky.

Without insurance and other government supports, these growers would be betting the farm on their one crop. In fact, because too much rain, pests and many other hard-to-measure hazards can wipe out an entire harvest, no private insurer has ever been able to provide unsubsidized comprehensive crop insurance. Traditionally, farmers self-insured by planting many crops and otherwise diversifying their operations, imposing natural limits on crop size.

Contrary to the Morris Centre’s assertions, Ontario’s processing tomato-farming sector, which produces tomatoes for ketchup bottles and canning operations, is overwhelmingly driven by the need to manage risk. Ontario tomato farms face much higher risks than farms in California, where rain does not slow down harvesting machines during the time-sensitive harvest, or wipe out a farmer’s harvest, as happened in part of Ontario last summer. The risk of tomato farming in Ontario is so great that the processors — who can’t afford to have their plants idle because a farmer misses a shipment — manage the risk by diversifying the locations of the farms that supply them, and by requiring the farms to maintain surplus capacity in their harvesters. For these reasons, Ontario’s tomato farms operate their equipment just three to four hours a day during the seven-week harvesting season, while California’s run flat out, 20 to 22 hours a day. Because new California-style harvesters can’t be paid for when run just four hours a day, Ontario farmers purchase smaller harvesters or used ones — the ones California tomato growers discard.

If tomato farming in Ontario truly involved little risk, Ontario would be producing many more tomatoes. As it is, Ontario imports two to three times as much tomato as it produces, much of it from California. Canada, in fact, is California’s number one tomato marketing area.

Relatively small-acreage farms can be extremely profitable by serving lucrative niche markets. The many small farms of the greater Toronto area that supply restaurants with specialty vegetables, health food stores with organic herbs, ethnic bakeries with exotic grains, and office buildings with luxuriant plants rival the region’s traditional farms, and together they now produce 67% more farm output than Prince Edward Island and 80% more than New Brunswick. Unlike mechanized industrial farms that primarily produce low-value commodities for export markets, and that must compete against countries with longer growing seasons or cheaper labour, the smaller farms serving local niche markets face little competition from distant producers, making them viable without subsidies. Rather than sustain agriculture, the subsidies only distort the agricultural sector away from innovation and entrepreneurship.

There is no glory in running large machines, new or used, and there is no shame in managing labour-intensive operations, as do farmers who serve the demand for fresh fruits and vegetables, and for many specialty markets. But there is value in being innovative and entrepreneurial, as small-acreage farms tend to be, and there is status in being off the dole.