Tuesday September 02, 2014

Farming drives local economy


It’s the middle of May and that means farmers across the Canadian Prairies are hitting the fields in what is one of the biggest annual economic stimulators for the regions.

There is still a vision among many of farms as quaint, idyllic operations, the stuff of children’s storybooks, but that is about as far from the truth as the moon being made of cheese.

Today farming is big business with investments in most farms larger than most businesses in a city such as Yorkton.

There is of course the massive capital investment of a farm these days.

Land values are climbing steadily as recent numbers indicate.

“Average farmland values continued to rise nationally in 2013, according to the most recent Farmland Values Report released by Farm Credit Canada (FCC).

Those increases were particularly significant in Saskatchewan.

“The average value of farmland in Saskatchewan increased by 28.5 per cent in 2013. Saskatchewan experienced the highest average increase in Canada, yet the average land price in Saskatchewan is still less expensive than in the neighbouring provinces. The latest increase is part of a trend that shows farmland values rising in that province since 2002. Saskatchewan farmland values increased by 19.7 per cent in 2012 and 22.9 per cent in 2011,” detailed the FCC release.

Farmland values last decreased in 1992, when they dropped by 2.1 per cent.

Go to buy a new four-wheel drive tractor, an air seeder and a combine, and you will chew through a million bucks rather quickly.

And so you get the idea of investment.

But there is also the annual operation costs associated with growing a crop.

And those costs are huge on an individual farm, and become economically significant provincially when taken across the entire farm sector.

When a farmer goes to seed a canola crop he can be investing up to $300 an acre, depending on variety, the level of fertilizer and micronutrients applied, and of course what crop protection products might be required to deal with weeds and insects, of in-crop diseases.

It doesn’t take long doing the math to see that would translate to near five grand per quarter. On a modest five section farm that means a farmer is investing near $100,000 to plant a crop.

Across Saskatchewan and the Prairies that multiplies quickly.

And it is money which rolls through the economy in numerous ways, from paying the wages at crop insurance, to keeping bulk fuel operators in business, to paying the wages of custom fertilizer and chemical applicators, not to mention buying seed from area seed growers, and of course paying staff on the farm itself.

All those investment dollars by a farm fed through various agricultural businesses within communities large and small across the Prairies.

When we drive by a local restaurant, or clothing store, we recognize the entrepreneurship behind such a business, but we don’t always think the same thing seeing a farmer working in the field.

But at this time of year we should take a minute to appreciate just what farming does for our economy each time the season turn to spring.



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