Farm Viability and Economic Capacity in Nova Scotia

Jennifer Scott, MES
GPI Atlantic, 2001

The ability to generate an adequate income from farming enables farmers to devote resources to quality food production and to land stewardship that is essential to maintaining the value of natural capital in agriculture.

An inadequate return on investment can produce a wide range of negative social and environmental effects, each of which carries significant costs. In extreme cases, when farmers cannot make ends meet, prime agricultural land may be sold and converted to other uses, resulting in the loss of a valuable natural capital asset and a decline in food security for future generations. An inadequate return on investment is therefore not sustainable in the long run from either an economic or an ecological perspective.

Although total farm cash receipts have risen 12% over the past 28 years, all other indicators of economic viability examined here are showing negative trends. If these trends continue at current rates, we are likely to see the virtual demise of several agricultural sectors in Nova Scotia, including apples, vegetables, beef and hogs.

Due to marketing boards and supply-side price controls, dairy and poultry are faring better than other sectors. Preliminary evidence also indicates that organic food producers who market directly to consumers are getting better prices for their products. Direct marketing avoids most wholesale, retail and other "middle-man" costs that normally reduce the proportion of food price sales accruing to farmers.

Like the Gross Domestic Product at the provincial and national levels, gross farm output and total farm cash receipts (the conventional indicators most commonly used to assess agricultural growth and health) can be very misleading indicators of economic wellbeing. Five additional indicators are therefore presented below that provide more accurate and comprehensive signals of farm economic health. These indicators show that farm sector economic health is in serious decline, even when natural resource and social health measures are not considered.

This report is the first data release in the Nova Scotia Genuine Progress Index Soils and Agriculture Accounts. Future reports, to be issued in the coming months, include assessments of soil quality, pesticide use, nutrient use, livestock yield, biodiversity, employment, community resilience, and trade in farm products.

 

Full report (PDF, 574 kb)

The Organic Agriculture Centre of Canada (OACC) gratefully acknowledges GPI Atlantic for permission to publish this article on our website.

 

Posted March 2009