About six per cent of Alberta’s farms operate and control about 40 per cent of its farmland, according to a new paper published by the Canadian Centre for Policy Alternatives.
“It’s not going to come as a surprise to anyone. We find that farms are continuing to get larger and larger. The number of small and medium farms are declining,” said University of Regina professor and study co-author André Magnan. “Our main takeaway is that more and more farmland is owned and controlled by a small number of very large operations.”
The study used datasets from the Census of Agriculture to estimate the concentration of farmland on the Prairies. So for Alberta, the 2016 census data showed that the six per cent of farms with 5,000 acres or more operated and controlled — that is, owned, rented or leased — 40 per cent of farmland. It was a similar story in Saskatchewan (eight per cent of farms operating and controlling about 38 per cent of land) and Manitoba (four per cent controlling 24 per cent).
“We think there is cause for concern around these kind of trends,” said Magnan. “When you have so much land concentrated in so few hands, it becomes harder for smaller farmers, younger farmers and new entrants to agriculture to access land.
“The reason is that those kinds of players are competing for the same land as someone who might have 10,000 to 15,000 acres of farmland. Those really large operations are much more likely to have the financial resources and favourable financing that allows them to outbid other buyers.”
Because smaller operators and new farmers aren’t “on an equal footing” in bidding for land, “we worry that it will become a bit of a cycle, where only the largest operations are able to keep acquiring more land and grow bigger and bigger,” said Magnan, an associate professor in the university’s sociology and social studies department who is co-leading a multi-year study on farmland ownership.
The study says a healthy farm sector would have farms of different sizes that have comparable chances of being successful.
“We would like to see a farm sector where a small-size farm can succeed just as well as a medium- and large-size farm,” said Magnan
Large farms are here to stay, but the researchers would like to see a diversified farming sector where odds aren’t stacked against small, medium and younger farmers.
The researchers also looked at the relationship between farm size and revenues, including gross revenues and net income, which is roughly comparable to a farm’s profitability, said Magnan.
“What was interesting in Alberta, looking across the board across farm sizes, is that we did not see a great difference between small farms and really large farms in terms of net income,” he said. “We can see that very large farms of 10,000 acres and above have much higher gross revenue per acre than small farms. (But) in terms of net income per acre, they’re not very different from small farms.”
In a more detailed look at one province (Saskatchewan) in one year (2016), the study finds that ratio of gross revenue per acre divided by input costs per acre doesn’t change much no matter how big the farm.
“It’s pretty well constant across the board at $1.30,” said Magnan. “You get about $1.30 of outputs per $1 of inputs no matter what size farm you are looking at.”
That suggests large farms might be generating higher net incomes simply by spending more heavily on inputs like fertilizer and herbicides, he said. However, the study (which can be found at www.policyalternatives.ca) says additional data would be needed to determine if larger farms are more efficient or not. The study was co-authored by University of Manitoba researchers Annette Desmarais and Mengitsu Wendimu, and Darrin Qualman, an analyst with the National Farmers Union.