JANUARY 2020 • COUNTRY LIFE IN BC


5 Subsistence farming is a thing of the past, isn’t it?


Agriculture is a business, and farmers shouldn’t be afraid to make money Agriculture, by definition, is all about the land. Whether farmers think they’re tending land borrowed from future generations or exercising property rights to be enjoyed


agriculture James Mack says many producers feel. “We’re right at that point


Viewpoint by PETER MITHAM


here and now (and often, it’s a combination of the two), none of it can happen without the land. This also means the land is often the single biggest investment farmers will make. But as each year’s reports


from Farm Credit Canada point out, farmers in BC face the highest land values in Canada. The cost of entry is high, prompting many to seek alternative arrangements to access land. By far the most popular is leasing, ideally on terms that ensure a reasonable timeframe for farm development and recouping set-up and operating costs. Nevertheless, boosting


margins is tough. The long list of variables that bite into farm revenues is endless. Somehow, farmers are supposed to anticipate where costs are heading and – despite being price-takers – come up with the cash to cover them all. Too often, though, the combined effects of Mother Nature and a father-knows-best approach by government leaves them pinched.


And pinched is how BC’s assistant deputy minister of


where costs are starting to go up faster than revenues, which means profitability is getting pinched,” he told representatives of the province’s farmers institutes recently. “[Profitability] is really what everyone cares about, right? Making


more money isn’t fun if you’re paying more for everything you do.” Mack isn’t the only person


making that point. Profitability of its vendors has been a concern for the BC Association of Farmers’ Markets, which has seen many small vendors enjoy stellar but brief careers because, as one consultant remarked, “poverty gets old fast.” Sweat equity is no replacement for real equity. While smart young farmers can bank on passion, most banks won’t lend against it. It’s even harder to eat, unless you’re swallowing pride. Many small-lot farmers are adamant that they don’t want to be big farmers, let alone act like them. They’re pursuing values-based farming, which doesn’t necessarily have a high cash value. Indeed, many find themselves shut out of certain market segments as a result of onerous regulation and certification requirements. “The pressure to become a


larger-scale business to be able to access those opportunities is getting stronger and stronger,” according to Mack.


While growers like Curtis Stone may harvest $100,000 from a quarter acre, inspiring many, many more continue to live below the poverty line on much larger acreages. And really, farming is no longer a subsistence activity, is it? We’ve all got to eat to live, and that includes farmers. It’s not a bad thing to make money, as Armstrong farmer and business consultant Andrea Gunner remarked at a workshop last year intended to give growers a better handle on their production costs.


The new year is a popular time to make resolutions and take steps to improve personal and financial health. On that note, there are several things producers old and young can do that will be helpful on both counts. • Pay yourself first. You have a few basic needs, and without the farmer there is no farm. Provide for yourself, so you can provide for others.


• Set priorities for paying others. It’s tough to know which bill to pay first. The small ones seem easy, but the line of credit may smack you with a higher interest rate or tougher penalties. Then there’s the government. Do you want your debts to attract their attention? Once you’ve determined who you want to pay first, try to standardize the payment


and payment schedules as much as possible so it’s predictable, even if your income isn’t.


• Stay focused. This is one of the most common lessons new entrants, particularly in the produce sector, learn after a couple of years. Suddenly, ambitions of growing 20 crops hit fickle consumers and they decide to only grow what sells. Why not start small and add crops? You’ll not only avoid wasting time and resources on unprofitable offerings, you’ll be able to grow in step with customer demand.


• Don’t compromise on price. People value what they pay for, and you have needs and obligations (see the first two points). Most farmers are price-takers but if you market direct to consumers,


you have an opportunity to set a price that works for you – and stick to it.


• Track your data. Many farmers are embracing technology that can predict weather and climate impacts. Why not do the same for farm finances? This can help set benchmarks for the farm revenue, the cash you’ll actually need to cover expenses, and even what those expenses are. Being able to anticipate the impact of interest rates or the tax implications of shifts in revenue are important. Patterns might not start to emerge until you have at least three to five years under your belt, but getting in the habit of knowing the numbers can make your farm more resilient in the face of change.


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