KEMPTVILLE – Municipalities and their economic development departments in Leeds, Grenville, Frontenac and Lennox and Addington (LGFLA) Counties will be ignoring at their peril a major segment of their economy if they fail to recognize the impact agriculture has on the region.
Agriculture is a $534-million a year industry in the four counties and either provides or supports 11,581 jobs - eight per cent of the total workforce - in the four-county region.
Far from being a declining industry, farmgate sales in the region increased seven per cent, from $171-million to $183-million, between 1991 and 1996 and despite a decline in the number of on-farm jobs, the industry’s more capital intensive nature has created greater demand in businesses that directly support it. These spin-off benefits mean that every on-farm job in the four counties supports a further 1.7 jobs and every dollar in farmgate sales translates into $1.90 in sales by businesses that deal with farmers. Annual farmgate sales of $183.3-million produce a further $351.6-million in agri-related sales across the region.
These figures - and a host of others - are contained in the 137-page study entitled the Impact of Agriculture on the Economy of Frontenac, Lennox & Addington and the United Counties of Leeds and Grenville released in Kemptville and Odessa June 29.
Mistaken view of farming in decline
The study, funded by local federations of agriculture, the federal and provincial governments and local county governments and economic development agencies, was carried out by Dr. Harry Cummings and his team from the University of Guelph’s School of Rural Planning and Development.
The first such study was carried out in Huron County in 1996 and the results of the second, conducted in Prescott-Russell and Stormont, Dundas and Glengarry, was released in early 1999. Similar such studies have been conducted in Simcoe, Lambton and Perth Counties and others are now being carried out in Carleton, Lanark and Renfrew Counties as well as in Middlesex, Oxford, and Elgin
The need for reports of this nature came about several years ago when agricultural groups decided to counter the mistaken assumption in rural municipalities that because the number of farms in Ontario was declining agriculture was a moribund industry and economic development efforts would be better directed if they attracted service and secondary industries.
But Cummings’ studies have shown that agriculture remains part of the bedrock of Ontario’s economy, increasing from $5.5-billion to $7.8-billion between 1986 and 1996, an annual rate of increase of 3.5 per cent.
Among its recommendations is the suggestion that value-added industries be encouraged to develop in the study area so that the agricultural raw materials grown or produced on acreage from Cardinal to Napanee is processed locally, providing more jobs and investment for the local economy.
"Producers and processors will have to become more resourceful in finding services in the private and public sectors that can aid in developing their business plans. This may mean approaching organizations such as local business development agencies that have broader mandates that working exclusively with the agricultural sector. For business and economic development officials, greater emphasis should be placed on co-ordinating efforts between primary production and manufacturing to maximize the retention of income and employment in the area by exploring or development opportunities for preparing and processing more locally grown commodities of for final consumption," the study recommends.
Don’t repeat provinces’ errors
It also suggests that local governments and development agencies not repeat the mistakes of provincial governments which squander their comparative advantages by offering subsidies to attract industries unrelated to their existing resource base.
The focus of the study is on sales and jobs related to agriculture and it contains basic demographic information on the four counties which show that in the five-year period ending in 1996, the overall population of the four counties increased by six per cent. This is below the provincial average, but significant increases were recorded in rural municipalities while the populations of the two major urban centres, Kingston and Brockville, remained more or less static.
Several townships increased their populations by more than 10 per cent, the leader being North Grenville, which saw its population rise by more than 24 per cent. South Frontenac’s went up by nearly 14 per cent, Kitley by more than 12 and North Frontenac by more than 11 per cent.
According to 1991 and 1996 census figures, the only municipality in the four-county study area that recorded a drop in population was the town of Prescott, which saw its numbers go down by .71 per cent.
Competing land uses
The growth in rural versus urban populations means there are competing uses for the rural landscape, Cummings said as he unveiled the study at the Kemtpville Truck Centre June 29 before a gathering of federation members, local politicians, OMAFRA members and economic development officers. No provincial or federal politicians accepted federation invitations to attend the Kemtpville unveiling.
Farmers and their new neighbours are going to have to find a way to live in harmony, he said of this demographic shift.
The number of farms in the four-county region increased between 1991 and 1996 by four per cent, from 2,951 to 3,069, due mainly to a large increase in specialty farms, defined in the study as those engaged in nurseries, greenhouses, sheep, horses, deer, apiaries, fur farms, maple syrup production, mushroom production and Christmas tree production, among others.
Grenville County is the leader in specialty farms, which represent a full 25 per cent of all farm types. This is reflected in the smaller farm size in the county, which is below both the provincial and Eastern Ontario average, while farms in the rest of the study area are on average larger than both the Eastern Ontario and province-wide averages.
Gremnville also has the highest county-wide average of farmgate sals per acre, increasing 5.16 per cent betsween 1991 and 1996 to $315. This is still below the Eastern Ontario average of $320 per acre and the provincial average of $560.
The growth of the specialty sector has served to enhance agricultural diversity, which, as in other study areas, has helped mitigate against the downturns in one or two major commodity areas.
The number of on-farm jobs declined between the two census takings by 1.6 per cent, but this is well below the province-wide decline of 6.3 per cent in the same five-year period. Two counties - Frontenac and Grenville - actually recorded job gains in the agricultural sector, again reflecting the more labour intensive nature of the specialty farms that have sprouted up in the two counties.
Higher than provincial average
Direct employment in agriculture in the four counties accounts for 3.24 per cent of the total labour force, well ahead of the 2.48 per cent shown in the study on Prescott-Russell, Stormont, Dundas and Glengarry, and Ontario, in which farming accounts for 2.43 per cent of the total labour force.
Cummings and his University of Guelph team estimate there are 664 businesses beyond the farmgate related to agriculture in the study area. They surveyed 275 businesses - all of which supplied employment figures and 241 of which supplied sales figures - to produce an estimate of 1,935 jobs tied indirectly to agriculture through purchases by agri-businesses and from secondary sources the researchers concluded that a further 5,321 jobs in education, health and government services are supported by farming.
"Compared to some of the more prominent manufacturing firms in the study area, agriculture is clearly a major force in the local economy. With its direct contribution of 4,325 jobs, agriculture employs six times the workforce supported by Good Year (Napanee) and seven times the workforce supported by Bombardier Transportation (Kingston/Millhaven)," the report states. It also notes that the agricultural sector is the equivalent of two Duponts (total of 2,333 jobs in the area) and three SCI Systems (1,550 jobs).
Not surprisingly, the report notes the impact on agriculture in the region of the Canadian Shield and its analysis shows that townships in the southern parts of the four counties have on average higher farmgate sales than those in the north, particularly in Frontenac. The mediating factor of the St. Lawrence River and Lake Ontario on climate conditions were also noted by Cummings in this "north-south issue".
Forty-eight per cent of the study’s total area was deemed unsuitable for agriculture with the bulk of this located in the northern half of Lennox & Addington and the northern two-thirds of Frontenac.
Municipalities in the southern end of the study area have a higher concentration of livestock operations and have a higher percentage of their total acreages in crop production than their northern counterparts.
They have higher gross receipts both by farm and by acre of farmland than those in the north.
Average farmgate receipts across the four counties were $59,000 per farm, below the Eastern Ontario and provincial averages, but four townships exceeded the regional average while two, Elizabethtown in Leeds and Adolphustown in Lennox & Addington, exceeded the provincial average.
Per farm gross sales in Adolphustown topped all those in the study area, averaging $238,846 in 1991 and climbing 11 per cent to $265,683 in 1996. The greatest percentage increase was in Elizabethtown, which on a per-farm basis climbed 64.52 per cent from $121,663 in 1991 to $191,349 in 1996.
The lowest per-farm receipts were in the northern Frontenac township of Clarendon and Miller which dropped 45.77 per cent from $13,397 in 1991 to $7,266 in 1996.
Overall figures for Leeds County show that farmgate sales climbed 19.75 per cent between 1991 and 1996, from $59,178,856 to $70,869,418 in 1996.
Sales in Grenville dropped from $35-million to $33-million in the same period. Frontenac remained stable with a 1.77-per -cent increase, from $34.6-million to $35.3-million while Lennox & Addington saw an overall increase of four per cent, from $41.8-million to $43.5-million.
Although the study has an overall upbeat nature, it is not without its downside.
It notes the precipitous drop in dairy farms, which have declined from 36 per cent of the total in 1981 to 22 per cent at present. In 1986 there were 1,863 dairy farms and in 1996 this had declined to 1,531. In contrast, dairying represents 42 per cent of the farms in Prescott-Russell, Stormont, Dundas and Glengarry.
Grenville has lost a full 40 per cent of its dairy operations and this decline in these capital-intensive operations is having a direct impact on farm service-related businesses, particularly equipment dealerships and veterinary services, and in secondary businesses which are not directly tied to farming.
While the loss of dairy farms frees up resources for new productive uses, these may not provide the same economic returns and in the case of specialty farming, are not yet at a stage to take up the full slack left by the decline of dairying, the report notes.
From the Archives:
AgriFocus, July 2000
