Brenda O’Farrell
The Advocate

The Union des producteurs agricoles is calling on the Quebec government to create a special $300-million fund to help agricultural producers weather the increasing storm of economic pressures they face.

The fund, which would provide $100 million in aid per year for the three-year period of 2024 to 2027, would help farmers mitigate the impact of elevated interest rates to ensure their businesses survive.

To support their call for the fund, the UPA highlights recent economic trends. Most significant among them is the increasing debt Quebec farmers are racking up as they struggle with post-pandemic inflationary pressures.

According to the UPA, between 2012 and 2022, the overall debt held by Quebec farmers increased by 123 per cent, hitting $27.2 billion in 2022, up from $14.9 billion in 2012. By the end of this year, the overall figure of farm debt in this province is expected to hit $29.5 billion.

How that overall financial reality translates for individual farmers paints an even starker picture.

The average debt per farm in Quebec is predicted to hit $1.3 million this year, according to an analysis conducted by Statistics Canada.

According to StatsCan’s figures, the average debt per farm increased more than half a million dollars from 2011 and 2021, or by $562,543, bringing the average debt per farm to $1.1 million in 2021.

This continuing increase in the level of indebtedness during a period of higher interest rates is threatening the viability of many farm businesses, the UPA contends. With the average annual interest cost per farm expected to hit almost $66,000 this year, almost three times as much as the annual cost of $23,712 registered in 2021.

The ironic aspect to all of this is that the increasing financial burden is happening as farms are posting impressive growth in cash receipts, leaving most farmers producing and selling more as they sink further and further into debt.

According to figures produced by Agriculture and Agri-Food Canada, total farm cash receipts between 2012 and 2022 grew by $4.3 billion, total net farm income dropped by $352 million, hitting $959 million in 2022.

But the worst is still to come, according to federal forecasts. Net farm income is predicted to hit $66 million in 2024 – a historic low.

The aid program being touted by the UPA would aim to provide financial assistance to farm businesses whose profitability is compromised by rising interest rates. To be eligible for help, a farm would have to demonstrate it is facing losses, while being able to show the prospect to return to profitability in the future.