Reduced income on farms will negatively affect finances for Ontario

Did you know Ontario’s agriculture sector supports 164,000 jobs with over $7- billion in wages and salaries? A full $3.4-billion in government tax revenues are collected as a result of the economic activity generated by the farm output sector. This helps pay for our health care system, our schools and our infrastructure. Farm outputs contributed $22-billion in gross economic stimulus to Ontario in 2009. 

While those are impressive numbers that show the economic impact and the potential of the agriculture sector, unfortunately those numbers – and the related impact on the provincial GDP – are in jeopardy.

The Ontario Agriculture Sustainability Coalition commissioned a survey called the Economic Contribution of the Ontario Farm Sector and Economic Impact of a Reduction in Farm Income. The study determined the economic contribution of Ontario’s farm sector and the impact of a reduction in farm income, while focusing on the connection between farming and Ontario’s GDP.

Our net farm income in Ontario slid from $287-million on average from 2004 to 2008, to negative $50 million in 2009. That resulted in 4,000 jobs lost in the short-term. Long term implications are much more severe. OASC is developing practical solutions to manage farm income fluctuation to avoid these serious and negative impacts on Ontario’s economy.

One message that OASC has been strongly advocating rang clear throughout the findings in the study – agriculture matters to the province of Ontario, and it’s time to get serious about the future of farming.

Governments rely on a healthy farming sector for tax revenue. The decrease in net farm income in 2009 resulted in a tax revenue loss of $82-million. The outlook for 2010 is even worse: a farm income loss of $500-million is projected, which will negatively impact Ontario’s GDP by $3-billion in the long term, along with a $450 million decrease in tax revenues.

While the study does contain a lot of data, the bottom line is that agriculture is big business that Ontario cannot afford to lose.

Seventy per cent of Ontario’s farm production is bought by Ontario food processors – a $33 billion industry that directly employs 110,000 Ontarians. As farmers we rely on our processors as buyers. As buyers, our processors rely on us to provide the safe, quality products at competitive prices.

The whole industry is important to the health of our people and our economy. But the farm situation is serious.

Through OASC, Ontario farms have expressed their concern about the financial health and stability of our farm sector as well as our future ability to grow our food locally while contributing to the economic well-being of the province.

The Ontario agriculture sector is in need of critical investment programming to not only maintain jobs across the province, but to adequately support Ontario’s economy. The Ontario Federation of Agriculture is working with OASC to implement predictable and bankable risk management programs that will assist in maintaining a viable farm sector for the province and build a sustainable farming and food economy.

It’s time we implement real solutions in collaboration with our federal and provincial governments to drive the economy and contribute to a successful future for farming.