Michael St. Amant
FOR BRANT NEWS
If you are like me, until recently you will have taken apples for granted.
I’ve lived by the adage that “an apple a day will keep the doctor away.”
I’ve also taken for granted that apples are a reasonably priced commodity with healthy undertones and a product that fitted nicely into the 100-mile diet.
I enjoy St. George’s Applefest as a time in which we celebrate the apple crop and the hard work of the farmers that produce this crop.
Last week’s article in the Brant News examining the impact of this year’s loss of 80 per cent or more of the apple crop on local growers has challenged my perception that we should take this or any other farm product for granted.
More importantly, however, this year’s crop failure – brought about by unusually warm weather followed by a cold snap in March – raises much broader issues with respect to farmers and farming in Ontario.
Since 2001, the apple industry in Ontario has been declining. Although Ontario still accounts for 36 per cent of Canada’s planted acreage of apples, the number of hectares planted has dropped from 9,814 to 6,394.
During the same period, the number of Ontario apple farms has declined from 1,400 to 1,000. Ontario has also seen its national share of marketed production of apples drop from 52 per cent to 38 per cent.
Production of the 16 varieties of apples produced by Ontario growers has declined from 241,500 metric tonnes to 126,600 tonnes. The farm gate of last year’s crop was about $65 million.
All of this suggests that the industry has been contracting due to low returns, higher farming costs, urbanization and the cost of regenerating orchards.
In the midst of all of this, a crisis of the proportion that individual growers are facing this year is significant. Besides some flexibility in the number of pickers and processors that will be employed, the grower still has to invest in the maintenance of his orchard, knowing full well that he will not have much of a crop.
Many do not have crop insurance and the Farm Income Stabilization Program is significantly underfunded and in its infancy.
Typically, purchase of crop insurance is a business risk that farmers take on depending on cost. The risk is assessed by age of the orchard, what percentage of production is tied to a specific crop and whether, from an accounting perspective, the risk is forecasted to be within normal parameters.
Farmers who have purchased crop insurance will recover some, but not all, of their costs. For smaller operators who rely solely on apples for their income, with or without crop insurance, the impact will be severe.
While in practical terms a one-year setback does not mean the industry will disappear or that there will be a massive number of bankruptcies, it does have an impact on the overall stability of the industry.
Unlike industry, which can adjust to market conditions on the production side, once seasonal activity has begun on a farming operation there is little room for adjustment.
That is why I tend to see the current situation with apple, pear and peach producers as more of a catastrophic loss rather than simply a business risk. The normal parameters which would apply to a business risk disappeared with the late frost in March.
At the same time, I believe we need a strong agricultural industry and that farmers need stability. To my friends who would argue that market forces and risk are the determinants in how we should approach this issue, I would say that you have buried your head in the sand.
Future economies will be dependent upon agricultural strength as much as industrial capability. In times of crisis, we have bailed out the financial and automotive sectors. This may be on a much smaller scale, where employment numbers are lower and percentage of GDP smaller, but the message and moral output is just as large. We need our agricultural industry and its spin-offs.
In speaking to farmers and apple producers, they do not want a free ride or a handout. At the same time, they do want help in overcoming what is hopefully a short-term problem.
One way to achieve this is for government to provide interest-free loans repayable over five years, accessible to farmers impacted by this year’s crop failure. This way, those who have crop insurance may or may not decide to access the loans. Those who did not have crop insurance could use the funds if they need to.
Either way, it would help apple farmers deal with an immediate crisis. More importantly, it would provide some stability going into next year.