Farmers are particularly affected by inflation, so much so that 11% of them plan to stop or close their business, according to a survey carried out by the Union of Agricultural Producers (UPA).
The increase in the cost of production inputs, such as fertilizers, fuel and seeds, has been almost three times higher than inflation (28% between January 2020 and September 2022), according to the UPA, which asks for the assistance from the Government of Quebec.
“We can’t get anywhere,” said grain producer Pascal Rheault, who was present at a UPA press conference in Longueuil on Wednesday morning. “In the regions, we are used to having higher transport costs, but with the rapid rise in the cost of diesel, each transport that enters or leaves my region costs between $500 and $600 additional,” indicated the one who is also president of the UPA in Abitibi-Témiscamingue.
The farmers of the outlying regions are “the canaries in the mine” and, currently, “the canaries are bending their legs”; “They are going to need a breath of fresh air,” imagined the farmer.
According to the survey carried out by the UPA, 20% of agricultural businesses are currently in poor or very poor financial health, and half of them expect their situation to deteriorate over the next year.
Four in ten businesses indicate that rising interest rates could prevent them from meeting their financial obligations and 11% plan to stop or close their business.
Critical situation
The financial situation is particularly difficult for future farmers, who must bear the repercussions of the increase in interest rates.
“The increase in the cost of land, inputs and machinery”, combined with that of interest rates, constitutes “a real time bomb”, according to dairy producer Julie Bissonnette. “In five years as president of the Fédération de lalève agricole du Québec (FRAQ), I have never heard so many young people question their future in agriculture,” she added.
She is particularly concerned to see that many young farmers have to find a second job to support themselves. “In 2021, 44% of the next generation had a job outside” and “if we look at the start-ups, it is 70% of the next generation who must have another job”.
The dairy farmer pointed out that you have to be passionate to start farming, but “there is a limit to passion, because passion does not pay the bills”.
“The sinews of war in this type of production is grazing,” added Jean-Thomas Maltais, who operates a farm with hundreds of cattle in Saguenay. The increase in farmland values, combined with rising interest rates, means that producers “are at their wit’s end and some are giving up the fight,” explained the president of Les Producteurs de Quebec cattle.
The UPA is therefore asking the government to set up an “emergency account” type measure for agricultural businesses in great difficulty. Farmers would like this financial assistance to be partly non-refundable.
Among its other demands, the UPA would also like to see the government increase the amounts of the protection program against the increase in interest rates of the Financière agricole du Québec and improve the Agri-Québec program for agricultural businesses located in outlying regions. .
Political reactions
Official Opposition agriculture critic André Fortin called the results of the UPA poll “appallingly disturbing.”
The Liberal MP indicated that the Minister of Agriculture, André Lamontagne, does not seem to hear the “cry from the heart of the farmers”, because “every time we question him on the subject, he claims that everything is fine and that the agricultural sector receives all the necessary assistance from the CAQ government”.
At the end of the afternoon, Minister Lamontagne reacted by explaining by e-mail that he was “very sensitive to the situation faced by farmers” and that he had met with the leaders of the UPA last week about the survey results.
“In Quebec, most of our agriculture is covered by income support programs that capture rising production costs. What we’ve seen in the last few months is the speed of certain increases. There were sums in the last budget. I asked the teams of the ministry and the Financière [agricole] that we watch the situation closely, with particular sensitivity for the next generation of farmers. Our goal is to have the best tools and all the flexibility for our businesses in the current context,” wrote the Minister of Agriculture.