Media Clipping — Sat, Oct.4th, 2008 Chronicle Herald

The handwriting on the barn wall

For the past 10 years, Nova Scotia’s farm businesses have been subjected to immense pressures that continue to drain much of the vitality and creativity from the industry and place them in an uncompetitive position. All of these negative synergies have combined to have an impact much greater than any single event might have had in isolation, an impact that is beyond the capability of farm businesses to deal with either individually or collectively.

The negative synergies that have had such a devastating impact on Nova Scotia’s farm businesses are well-documented. Drought in 1997 was only a harbinger for the impact climate change would have on an industry already struggling to come to grips with immense changes in market structures, driven by the consolidation and the globalization of the food industry.

The red meat industry has all but lost a major component – the hogs. The ruminant livestock sector is still struggling with the impacts of BSE, and the entire industry is becoming increasingly frustrated by a "compliance conundrum" being driven by changing public values associated with the environment and food safety.

In August, GPI Atlantic released a new report, Economic Viability of Farms and Farm Communities, which confirms the precarious state of agriculture in Nova Scotia. The report examines industry trends since 1971 using several key indicators of farm economic viability, including net farm income, expense to income ratio farm debt, total debt to net farm income ratio, solvency ratio and return on investment.

GPI’s August 2008 report is an update on an earlier report. That 2001 report warned explicitly that: "All five indicators of farm economic viability … in the Nova Scotia farm sector show that farm viability in Nova Scotia is being seriously eroded … Put simply, many Nova Scotia farmers can no longer afford to farm … If current trends continue … major parts of the province’s agriculture sector will disappear."

The 2001 report was the handwriting on the barn wall: Writ large was the story of an industry that was clearly at risk. The 2008 report confirms that Nova Scotia’s agricultural industry continues to slide further away from economic viability, with all key indicators trending sharply downward.

Net farm income on Nova Scotia farms has dropped by an average of 91 per cent since 1971, and in 2007 reached the lowest levels ever recorded. Nova Scotia farms have recorded negative net farm income in four of the last six years.

The expense to income ratio on Nova Scotia farms increased from an average of 82 per cent in the 1970s to 97 per cent in 2006, far exceeding the 80 per cent threshold required for a healthy farm sector. This indicates that the prices paid to producers for their products are inadequate relative to rising input costs, and are not keeping pace with farm expenses.

Total farm debt in Nova Scotia increased by 146 per cent between 1971 and 2006; and the solvency ratio of Nova Scotia’s farm businesses has increased by 106 per cent since 1971, indicating that farms are becoming much less sustainable, with the increase in farm debt rapidly outstripping any appreciation in the capital value of farms.

With so many clear indicators that the industry is in decline, it should be obvious – even to those with a minimal understanding if the agricultural industry and its importance to the province’s future – that changes in public policy are required to transition the industry to one which can survive in post-modern global markets.

Most farmers now feel like Alice in Through the Looking Glass: Alice found she had to keep running faster just to stay in the same place. The queen’s advice to Alice: "Now, here, you see it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that."

While farmers have learned to run twice as fast, the problem is the road has become full of pot holes and obstacles. As the GPI report suggests, few have the resources to "stay the pace" any longer.

The realization that you don’t have the resources to keep up with the future is quite disturbing for any individual who has hundreds of thousands of dollars and a lifetime invested in a farm business. It becomes even more disconcerting with the realization that the circumstances that have contributed to your situation are, for the most part, outside your own sphere of influence.

Eight years ago, farm leaders in Nova Scotia recognized that change was needed; they also recognized that change has to begin somewhere – with a planning process. It doesn’t just happen – people, stakeholders, have to make it happen. For eight years, farmers have engaged industry stakeholders in what can only be described as a comprehensive approach to planning for the future.

At this point, it is beginning to appear that government has viewed farmers’ efforts to attempt to manage the industry’s problems and their future as a useful diversion, providing cover for the kind of superficial support that has been provided – support that will always result in disillusionment as the expectations of those in need are raised and then not met.

In The Hollow Men, T.S. Eliot wrote that the world will end "not with a bang but with a whimper." Eliot’s perception might well describe the way farmers feel about the future of their industry. Agriculture in Nova Scotia will end – not with a sudden bang, but with a slow, grinding to a halt as the system just stops working.

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