Christopher Bonasia

Christopher Bonasia
The Advocate

Last year, a report warned incorporated farms had to prepare for climate reporting. The report noted that farms that incorporate are subject to the same legislation regulating other corporate businesses, and so are required to establish a board of officers and directors who are required to exercise care and due diligence for overseeing the farm’s operations and ensuring its long-term viability. They can be held accountable by shareholders if they don’t.

The issue came up again late last month, when the Commonwealth Climate & Law Initiative published its own legal opinion clarifying the legal nuts and bolts of how directors of Canadian corporations might face legal action for failing to address risks from natural disasters and climate change risks (termed nature-related risks, or NRRs). Though the opinion was directed at corporate directors across the nation’s economy, it identified agriculture among the sectors where businesses are most dependent on nature and climate for their profitability. That places directors of incorporated farms as particularly likely to deal with nature-related risks in the future.

Opinion is clear

The gist of the opinion is fairly clear cut — now that the risks of climate change are well established, a director who fails to acknowledge and prepare for climate threats to a farm business would fail their duties under Canadian law.

The laws requiring company directors to prepare their company for emerging threats are primarily found in the Canada Business Corporations Act (CBCA). The CBCA charges all Canadian corporation directors with a fiduciary duty to “act honestly and in good faith with a view to the best interests of the corporation,” and also with a duty of care to “exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.”

A duty of care

That duty of care includes a legal obligation to identify and manage foreseeable material risks. Risks of future climate impacts are now well-documented and very much foreseeable, and so they can now be considered to pose material financial risks to companies — either directly through physical risks like natural disasters, or indirectly through new climate regulations or from legal challenges arising from a company’s impacts on nature. 

Any single farm corporation’s obligation to address a specific NRR depends on the specific facts of the case. 

But farms are more threatened by climate change and natural disasters — which are becoming more frequent and intense due to the changing climate — than many other businesses.

Cost of risks mounting

In Quebec, where about 25 per cent of farms were listed as either family or non-family corporations in 2021, severe weather, like floods and droughts, was a major factor that led to La Financière Agricole disbursing more than $1 billion to compensate farmers (the average payment over the 10 years prior was $439 million). Hay producers in Abitibi alone received $6.8 million — up from an annual average of $1.7 million — because of an intense drought.

The legal opinion says all directors are required to, at a minimum, identify and assess how nature and climate risks could affect a company’s operations, value chains, strategy and stakeholder relationships.

Additional steps to avoid legal action include making an effort to understand nature-related risks that could affect their farms, and erring on the side of caution when considering whether such a risk needs to be disclosed. Directors and officers of a farm corporation should be trained to address nature risks and emerging legal expectations.

Farms that intend to take these steps and implement policies for nature-related risk governance, management, and disclosure policies can look to existing frameworks — like the Taskforce on Nature-related Financial Disclosures, for example.

“Directors don’t need to be expert scientists or activists, but they are required to consider nature-related risks like any other foreseeable risk to their business,” said Lisa DeMarco, senior partner and CEO of Resilient LLP and the opinion’s lead author.

“Ignoring nature risks is no longer legally defensible as proper corporate governance.”

Christopher Bonasia
The Advocate

A recent study improves projections for future crop yield by trying to estimate the financial trade-offs that influence farmers’ decisions about issues related to climate adaptation.

The results show that yields of six major crops — maize, soybean, wheat, rice, sorghum and cassava — could decline by an overall average of 25 per cent worldwide by the end of this century as adaptation efforts are held back by high costs to farmers and limited access to resources. 

Impacts from climate change will be felt worldwide, but with varying severity across crops and regions. Of the six crops, all will have lower yields by 2100 than they do today except for rice, where losses in some regions will be offset by increases where the crop benefits from new temperature and weather patterns.

Regionally, wealthy breadbasket regions like Canada and the rest of North America show some of the most severe losses, in part because limited climate impacts in those areas to date have not motivated farmers to adapt like those in other regions that are already experiencing severe changes. Figures included in the study show that in Quebec, yields for wheat, maize and soybeans are all expected to decline, though sorghum yields could increase.

While “wealthy-but-low-adaption regions” show the highest losses, the impacts to food security will be more severely felt elsewhere, and it will be poorer regions that are hardest hit by the loss of food access and greater price volatility.

Past research has estimated how climate change would affect crop yields in projections where farmers adapted either entirely or not at all. But this study factored in the financial trade-offs behind real-world management decisions, with estimates suggesting that adaptation rates would be influenced by how adaptation costs compare with income losses from climate impacts.

“Adaptation is costly to farmers,” said Andrew Hultgren, an environmental economist at the University of Illinois Urbana-Champaign and lead author of the study. “It is not free.”

While the researchers couldn’t collect data on all the myriad ways farmers can or will adapt to climate change, they were able to detect adaptation by identifying where losses occur alongside severe weather events.

For example, significant losses linked to severe heat in regions where high temperature shocks are rare indicate that adaptation had not occurred; at the same time, yields being maintained in regions that are used to high temperatures showed that farmers had taken adaptive measures, like by switching to heat-tolerant or early maturing varieties.

But as Hultgren and his colleagues note, the new varieties often produce lower yields per acre, and other adaptive measures to different climate impacts have their own financial burdens. These costs can mean that it may be more profitable for farmers to not adapt, and so they are less likely to.

Notably, the researchers were not able to account for future advances in technological, nor for farmers changing crops to better accommodate altered growing conditions. But the study points to a gap between what is possible and what is happening, as better access to resources or providing financial support for climate adaptation could change the balance of the trade off, making it more likely that farmers will choose to adapt.

 “The results indicate a scale of innovation, cropland expansion or further adaptation that might be necessary to ensure food security in a changing climate,” the authors write.

Unfortunately, that support has been insufficient in Canada, as programs aimed at supporting farmer adaptation — like the On-Farm Climate Action Fund — remain over-enrolled and underfunded.

Similarly, profit margins for farmers are at a historic low point and are likely to be weakened by increasing consolidation in the agri-business sector, such as by the recently finalized Bunge-Viterra merger that Canada’s competition watchdog said would have “substantial anti-competitive effects” before the federal government gave it the greenlight back in January.

While the study doesn’t answer whether adaptation can sustain current yields against climate change, it does suggest that keeping farmer profits low and failing to provide sufficient climate adaptation support will hold back efforts to limit losses.

Christopher Bonasia
The Advocate

Canadian agriculture has likely benefitted from a “warming hole” that has moderated how the country experiences the climate change impacts felt by the rest of the world, but scientists are unclear on how long that will last.

A warming hole is what scientists call an area where temperatures do not warm as rapidly as expected, even amid broader global warming trends.

The warming hole phenomenon has been well documented in published research. Scientists first began documenting climate change in the 1950s, but as data showed temperatures around the world rising on average, they noticed a different trend across the North American Southeast and Midwest — those parts of the continent showed unexplained cooling.

In the U.S. Corn Belt, maize yields increased by 5 to 10 per cent each year in the mid-20^th century, linked to cooling temperatures. There has also been notable cooling in the wheat growing areas of Canada.

Study looked at effect on farming

The warming hole’s influence on North American food production was raised again recently in a new study from Stanford University, entitled “A half-century of climate change in major agricultural regions: Trends, impacts, and surprises.”

Among the authors’ observations, global yields for major crops like wheat, maize and barley were 10, 4 and 13 per cent, respectively,  lower than they would have been without climate change. Although past research has indicated some climate impacts — like warmer temperatures and longer growing seasons — might increase crop production, “losses likely exceeded those benefits,” the authors write.

Interestingly, for soybeans and rice, “carbon-dioxide benefits likely exceeded climate-related losses.”

Crop data studied

The main point of the research was to analyze historical data of crop yields across the world and compare it with projections from climate models. The study showed that the models, for the most part, aligned with the impacts that were actually observed, though they consistently overestimated warming and drying in North America, so crops in large areas of Canada were not affected as severely. Researchers chalked this up to the warming holes’ influence.

The trend is both easy and difficult to square away with public discussions about climate change. On the one hand, the seriousness of climate change continuously fails to gain traction among many in the North American agriculture sector, which could be connected to climate impacts being more moderate than elsewhere.

 Other devastating effects

But both Canada and the U.S. have experienced devastating consequences of climate change, like worsening storms, heat waves and more intense wildfire seasons. And while warming may be more severe in the rest of the world, average temperatures across the country are noticeably rising in North America, too. The prairie provinces in particular have experienced significant drought conditions in past years, though some farmers have noted past droughts — like that of 1945 that was declared an emergency crop year under the Prairie Farm Assistance Act — to suggest that those occurrences are not proof of climate change.

However, scientists have not been able to clarify the cause of the trend, and so they also are not able to project when it may or may not cease to lessen climate change’s impacts on North American crops.

The researchers of this study suggest that the warming hole could be a result of the climate changes felt across the world and so might persist into the future. However, they note that analyses of other variables indicate potential future drying that could worsen the outlook for Canadia crop growing.

Christopher Bonasia
The Advocate

New studies continue to suggest that agrivoltaics – the dual use of land for solar energy production and agriculture – can work for both farmers and clean energy production, but the pairing is more nuanced than a straightforward win-win.

Trials on agrivoltaic sites in the northeast United States show that solar panels help produce better quality forage, while grazing tends to build soil health. The findings are presented in a recent study by the American Farmland Trust, “Sheep Grazing Impacts on Soil Health and Pasture Quality at Commercial Solar Sites in Northeastern USA.”

Measurements taken on 28 grazed solar sites over two years were compared with fenced-off control sections and to three ungrazed solar panel locations.

Improved forage quality

Forage quality improved under solar panels year-over-year on all sites in all seasons, with forage analyses showing increased crude protein and lower non-digestible fibre and neutral-detergent fibre.

The study also suggests that grazing under the panels tended to improve soil health, and points to increased organic matter and better pH levels. However, the analysis of effects on soil health fell just shy of being statistically significant, with a p-value of 0.06. This means that, if grazing had no effect on soil health, the researchers would still expect to see the same results 6 per cent of the time. A p-value of 0.05 or lower is considered the threshold for statistical significance.

The mutual benefits shown in the study support efforts to pair solar power generation and food production to reduce competition between the two land uses.

Significant power potential

In 2023, another study — The Agrivoltaic Potential of Canada, released by Western University —stated that agrivoltaics offered significant opportunity for Canada, claiming that 25 to more than 33 per cent of the country’s electricity energy needs can be met if agrivoltaics were installed on only 1 per cent of current agricultural lands.

In Quebec, this mean the province would be able to completely shift away from burning fossil fuels for electricity generation by installing solar panels in only 0.01 per cent of farmland, because so much of the province’s electrical needs are already met by hydropower.

Solar grazing with sheep has drawn a lot of attention because it does seem to be a good pairing, but balancing land uses can get trickier when other kinds of food production are displaced to build solar panels.

Grazing among panels

Notably, all of the solar sites in the American Farmland Trust’s study had been constructed for the purpose of energy generation. The sites had mostly been croplands for hay or corn before hosting solar panels, with a lesser portion of sites having been open fallow land or woodland. This sample selection was by design, so that the researchers could start from a blank slate at all locations. Local graziers had been hired later to operate the land as agrivoltaics sites.

Some crop farms have been able to incorporate solar panels, though this practice is used to a lesser degree than grazing. But sheep are not always the best agricultural land use for all land types, and solar developers may still push solar grazing as a way to access agricultural land.

Last summer, the Alberta Utilities Commission denied a permit for the Westlock Solar project that was sited on Class 2 land. The commission said the developer’s plan to hire an operator to graze sheep on the site would downgrade the value of the land’s current crop production.

Westlock had chosen not to plan for crop production so that it could space panels closer together to have a smaller land footprint, and because specialized equipment to grow crops under panels would be a costly deterrent for farmers.

The tension between land uses was highlighted in yet another recent study of agrivoltaics sites in California, Impacts of agrisolar co-location on the food–energy–water nexus and economic security. The researchers found that agrivoltaics did displace food production, but farmers with solar panels on their land reported greater economic security as expenses for inputs like fertilizer, water and farming supplies were lower, and income from selling made up for lost crop production. 

Christopher Bonasia
The Advocate

Canada released its 2025 National Inventory Report in March detailing the country’s emissions across all economic sectors, including agriculture.

The report is released annually as part of Canada’s obligations under the United Nations’ Framework Convention on Climate Change. It reflects the state of efforts to reduce emissions shown in analyzed data. The information in this most recent report covers emissions in 2023. While the country’s emissions overall were lower than any year since 1995 — except 2020, because of the COVID-19 pandemic — emissions from the agriculture sector have remained mostly steady since 2005.

Focusing singularly on emissions is the wrong way to address agriculture’s role in climate change. Measuring the amount of carbon released from farming obscures the environmental trade-offs of growing food, not to mention the pressures of selling that food at a price affordable to consumers and still maintaining yields to ensure sufficient food supply. But the emissions data revealed in the inventory report is a driving force of national policy, and so is important to examine.

Overall, emissions have dropped

Canada produced 694 million tonnes of carbon dioxide equivalent (MT CO2eq) across all sectors in 2023. That number is 0.9-per-cent lower than the year before and shows an 8.5-per-cent decrease since 2005, excluding emissions from the Land-Use and Land-Use Change and Forestry (LULUCF) sector. Agriculture contributed 55 MT CO2eq, or 7.9 per cent of the total amount.

Canada’s agriculture emissions are 30-per-cent higher today than they were in 1990, though they have remained remarkably constant since reaching a peak in 2005, dropping only 2 per cent since then. Livestock populations — and their associated emissions — have stayed about the same during that time. And while emissions from fertilizer use has gone up, the area of perennial cropland has gone down. The sector’s share of national emissions stayed at about 7 per cent from 1990 to 2020, but has since increased to almost 8 per cent due to reductions across the rest of the economy.

Beef largest emitter in ag sector

Almost half of the agriculture sector’s total emissions came from enteric methane (26 MT CO2eq), almost all of which was produced by beef cattle (21 MT CO2eq, which include dairy heifers). Manure management, which is counted in a separate category, produced 7.7 MT CO2eq.

The second-largest source of agriculture emissions was 18 MT CO2eq from nitrogen dioxide released from soils, which has increased 76 per cent since 1990. These emissions are released from inorganic and organic fertilizers and from decomposing crop residues. In 2023, 9.3 MT CO2eq of soil emissions was from inorganic fertilizers, while 2.2 MT CO2eq of soil emissions were moved by conservation tillage practices.

Croplands typically show an overall net removal except during some extreme drought scenarios, like in 2002, 2003 and 2022. Those net removals have on average increased because of “improved soil management practices, including conservation tillage and an overall gradual increase in crop productivity resulting from improved and more intensive practices, like the reduced use of summer fallow.”

However, net removals have declined since 2005 because of decreasing perennial land cover that “has largely offset removals resulting from increasing yields.”

Canada’s government has committed to reducing the country’s emissions by 40 to 45 per cent from 2005 levels by 2030. Current policies include agriculture among the sectors that will provide some of these reductions, but so far farm emissions have shown little change in the last couple decades.

Meanwhile, electricity generation has led the country’s downward trend in emissions because of the phase-out of coal and the expansion of renewable energy capacity. Most sectors have cut emissions by some amount; the main exceptions are emissions increases in the oil and gas sector, which are “attributed mainly to continued production growth in Canada’s oil sands operations,” the report states,  and from light-duty gasoline trucks.