Friday, June 13, 2014

As the cattle industry consolidates, how do we protect our native grassland?

Swift Current-Webb PFRA Pasture Manager Mert Taylor (image by Jon Bowie)
2014 is the International Year of the Family Farm. According to the United Nations Food and Agriculture Organization, there are more than 500 million “small holder” family farms on this planet. Of course most of those are in Africa and Asia, but that is still an impressive number. 
How many small holder family farms were here on the northern Great Plains before the internal combustion engine transformed our rural landscapes? In 1936, when the province had 930,000 people, more than half of them lived on a total of 142,391 farms (Saskatchewan Encyclopedia).

Today we have somewhere fewer than 40,000 farms. Many have off farm income and most of them do not feed themselves the way their subsistence-based predecessors once did in the middle of the last century.
The number of farms in Saskatchewan continues to drop rapidly. In fact it fell nearly 17 per cent in five years from 2006 to 2011. 

But what is a small holder family farm anyway? A family-owned corporation that runs a feedlot employing twenty people and bringing in receipts of $3 million a year is included in the definition of family farm, but no one would call them “small holders.” Cargill is owned by a family. 

On the other hand, a husband and wife who run their own ranch grazing 10,000 acres of leased and private land but only bring in $150,000 in gross receipts are legitimately a family-sized operation. Is it fair to call them “small holders” though? They may not be making enough net income to pay the bills without off-farm income but they have a lot of land in their care. The average Saskatchewan farm is now 1,600 acres--up from 2006 to 2011 by 15%, 2 points short of the percentage of farms we lost in the same period. If you are cropping 1,600 acres you may not be a small holder, but you are likely struggling to make enough to cover your expenses. 

If we look at gross income as a way of defining the small farmer, we quickly find out why there are very few of them left. There simply is no money in it if you stay small and those that remain small are in it more for love than for money.

Field cropping farmers in Canada who bring in less than $100,000 in gross receipts have a ratio of expenses-to-receipts of 84 cents to the dollar. Beef producers in that same category, however, were much worse off at 96 cents to the dollar. Not a lot of margin to be had in beef until you get over the $100,000 in gross receipts mark, when the ratio improves to .85.

According to the Stats Canada site, “Farms raising predominantly beef and ‘all other animals’ had the lowest proportions of farms covering their expenses and also had relatively large numbers of farms in the lowest receipts class. For all beef operations, the proportion with receipts that met or exceeded their operating expenses came in at 51.9%. . . .” 

That is bad news for our smaller cattle and bison producers in Canada but what does it mean for native grassland ecosystems? If the beef industry continues to consolidate and more of our grassland is concentrated into fewer hands—whether through ownership or leasing of Crown land—the quality of land management would not necessarily have to decline and could in theory improve. The wild card that will determine which way things go is the role of the public, both in the marketplace and through government policy. 

Large incorporated beef operations that are left to merely follow the marketplace’s demand for low per-unit prices and maximum yield will be driven to look for more ways to cut costs and increase scale to find the point where their expense-to-receipts ratio hits a sweet spot. Conservation and the public interest in healthy grasslands will only enter the equation incidentally to the extent that the producer will need to save some grass for next year. Concern for species at risk, oil and gas development, biodiversity, invasive species, soil conservation, carbon sequestration, and public access to Crown land will all remain outside the consideration of producers, large or small.

For those values to have any influence over the grazing management of our remaining native prairie, the public either has two options: 1. we vote with our pocketbooks by purchasing grassland-friendly beef and bison or 2. we work with government agricultural and environmental agencies to create pricing structures on leased Crown land as well as other incentives and disincentives that will enable our producers to continue protecting our native prairie, and improving their stewardship where possible. 

Realistically, we will likely need to do both—work with market instruments and environmental policy—to protect our native grassland ecosystems as the beef industry continues to change and consolidate, driving smaller producers from the land.

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