Farm Succession Conference 2002

Study indicates 32 per cent of farmers may exit the business in 2006
By: Doctor Larry Martin

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An analysis of the 1996 federal census (1996) shows that 32 per cent of all farmers in that year were 55 years of age or older. If all of them were to retire at age 65, it means that 32 per cent of Canadian farms will change ownership, in theory at least, in 2006.

That observation was made by Doctor Larry Martin, Chief Executive Officer of the George Morris Centre based in Guelph, Ontario. Martin did a study of the 1996 census to identify possible trends.

He admits that many farmers who were 55 in 1996 will continue working well past the traditional retirement age so the 32 per cent figure is likely high (making it more like 25 per cent). But it does confirm that farm succession will be a major development this decade.

Will retiring farmers be ready? The numbers from the 1996 census would seem to indicate the answer is no.

Most won't have sufficient income

The figures show that the national average of farm capital per retiring farm operator is $402,046. If sold at market prices, these assets would produce an annual interest income of $32,164 per farmer, assuming an 8 per cent interest rate.

That yearly income figure is below today's average family income and points to the need for addressing the issue of retirement income.

The study of the census shows that farm transfers will vary widely across the country in terms of commodity. In Quebec, for example, dairy operations are in the majority while grains (except wheat) and oilseeds top Ontario (followed by dairy and cattle), wheat in Saskatchewan, cattle in Alberta and a mixture in B.C. (of fruits, poultry and egg, cattle, dairy, field crops and specialty farms) and the Maritimes (dairy, poultry and egg, cattle, field crops and specialty farms).

Martin said, as a result, the production management issues of farm transfer will be quite different based upon geography.