Agriculture in Canada
Definition The raising and preparation of crops
and livestock for Canadian and foreign markets
Crisis characterized Canada’s agriculture in the 1980’s:
Tens of thousands of Canadian farmers lost their land,
homes, and way of life, as the agricultural economy col-
lapsed.
The 1980’s was a decade of crisis for Canadian farm-
ers. A host of problems arose that combined and
continued throughout the decade, devastating Can-
ada’s agricultural sector. Farmers across Canada
suffered immensely, although those in the Prairie
Provinces of Alberta, Saskatchewan, and Manitoba
experienced the greatest hardships. Many of the
older, better-established farmers endured and sur-
vived the decade. Younger farmers, however, espe-
cially those who began farming in the 1970’s, were
decimated by the economic events of the 1980’s.
Revenues Fall as Expenses Rise At its most funda-
mental level, the Canadian agricultural crisis of the
1980’s was precipitated by overproduction, which re-
sulted in low commodity prices and abysmally low
farm incomes. As world markets were flooded in the
early 1980’s with surplus commodities, including
wheat, barley, oats, and canola, prices fell sharply.
Early in the decade, the net farm income fell to
between $10,000 and $12,000 annually, a paltry
amount for farm families to provide for life’s necessi-
ties for a year. As the agricultural recession intensi-
fied in the middle and end of the decade, farm
income plummeted further, reaching one-half the
1970’s level. By 1987, net farm income in Canada
had fallen below zero. It was simply impossible for
many farm families to sustain themselves, given these
deplorable conditions.
While the prices Canadian farmers received for
commodities experienced this drastic decline, pro-
duction costs accelerated sharply. The 1980’s were
marked by dramatic increases in the cost of chemi-
cals, fertilizer, pesticides, herbicides, and seeds,
which were the mainstays of modern Canadian agri-
culture. Of perhaps more importance was the oner-
ous increase in the cost of borrowing money, neces-
sary for most farms to continue operating. In the
early 1980’s, interest rates on farm operating loans
increased to 20 percent. Interest rates remained
high throughout the decade. These exorbitant in-
terest rates combined with farmers’ negative net
incomes forced many farmers to abandon their en-
terprises altogether. In short, inflation devastated
Canada’s farmers.
The Canadian farmer’s existence was further
jeopardized by an acute decline in the value of farm
capital, comprising such assets as livestock, machin-
ery, buildings, and land. Most damaging was the de-
cline in the value of land, especially for younger
farmers who had purchased farms in the 1970’s
when land prices were high. Canadian land values
declined by $40 billion in the 1980’s, while the value
of farmland and buildings dropped nearly 50 per-
cent. In some areas, declining land values exceeded
these averages. In Saskatchewan, for example, in the
five years between 1983 and 1988, agricultural land
prices declined from $300 to $80 per acre. Most
banks and other lending institutions refused to ex-
tend operating loans to farms on greatly devalued
land. Many farmers were simply unable to acquire
the capital necessary to continue operating.
In addition to the agricultural recession and the
rise in interest rates, a prolonged and severe drought
struck much of Canada, especially the Prairie Prov-
inces. Between 1984 and 1988, Prairie-Province
farmers suffered immense losses caused by the unre-
lenting drought, which was the worst in sixty-five
years. To complicate matters, the hot, dry weather
was ideal for grasshoppers, which repeatedly rav-
aged crops. When the sparse storm clouds finally
brought some rain to the prairies, they were often ac-
companied by strong winds and intense hail that left
crops ruined in their wake.Impact For individual farmers, the agricultural re-
cession of the 1980’s was devastating. Burdened by
enormous debt, low prices, and excessive expenses,
many were compelled simply to abandon their oper-
ations. The Canadian farmers who were driven from
business in the 1980’s typically disposed of their as-
sets at farm auctions, where they often received a pit-
tance for their land, machinery, equipment, and
other assets. These farmers abandoned their land,
homes, and way of life, realizing the futility of contin-
uing, given the severity of the agricultural recession.
Some received sufficient proceeds from their sales
to start life anew in another job or profession.
Many other farmers struggled on until they were
forced into bankruptcy or were foreclosed on by
banks and other lending institutions. These farmersThe Eighties in America Agriculture in Canada 33