The resilience of agriculture being tested right now
In 1918, Canadian farmers seeded 17,354,000 acres of wheat, up from 14,756,000 the year before. Dry bean acres increased during the same period from 93,000 to 229,000, according to Statistics Canada.
Prime Minister Robert Borden’s Conservative government at the time urged Canadian farmers to increase production to feed our First World War soldiers in Great Britain and those at home while ensuring there were enough reserves to send overseas as aide to the nation’s allies.
In the spring of 1918, the federally operated and newly minted Food Board, a regulatory body in charge of ensuring food remained affordable and in good supply, bought more than 1,000 tractors and sold them to farmers at cost as a way to support the requested increase in production, according to Canada’s War Effort 1914 – 1918, issued by the Director of Public Information in Ottawa in 1918.
It was also the year the Spanish Flu spread across the nation, in the end killing more than 50,000 Canadians, most of them between the ages of 20 and 40.
This was a watershed year for agriculture in Canada. It was a year the industry increased its resilience. After the First World War, farmgate sales changed from a representation of how hard a farmer worked to how well he or she could turn a profit in an increasingly global and regulated marketplace. Farmers became professionals in a way they weren’t previously.
Agriculture in 2020 needs its own dose of resilience.
The markets are poor. Talks with China over canola exports have been suspended over COVID-19 fears. Soybeans have suffered a similar fate at the same hand. That market isn’t rallying in any significant way, either.
Land prices remain high. Machinery costs, too, represent a time when companies felt vindicated in adding bells and whistles to new model years all at additional costs that profit margins could justify. It’s been a few years since that line of reasoning bore any meaningful connection to how things are on the average crop farm in Canada.
Transportation disruptions have cost the agricultural industry in ways it hasn’t fully seen yet. Demurrage is a cost that gets passed down the line to the primary producer — the farmer — and there is still a backlog of bulk vessels waiting at port. That expense line is still growing.
Amid these disparate and disruptive elements, there’s the seemingly galvanized skepticism towards our current government’s ability to draw and follow a proper roadmap for agriculture to thrive in Canada.
Then, as our cultural and political scaffolding of popsicle sticks come unglued and institutions like the NHL, NBA and awards ceremonies start to fall away over COVID-19, we’re left to make sense of another disruption.
This one is not terrible, but social isolation is a hard thing for the average person to interpret as anything other than cause for panic, regardless of the fact that should be far from panic-inducing.
This will affect the markets. COVID-19 will affect things in ways that are difficult to foresee, as the news is changing every minute and regulators are making bold, unpredictable and immediate moves.
The industry will work on restoring markets.
Machinery and land are ultimately vulnerable to what people are able and/or willing to spend.
Canada and other affected countries will do their best to contain and control COVID- 19, transportation systems will get back ontrack and governments come and go.
The agricultural sector has a lineage of resilience. It has survived the Great Depression, two world wars and the high interest rates of the ’ 80s (not without casualties, however).