The president and CEO of Farm Credit Canada (FCC) believes the future is bright for Canadian agriculture and that many farmers in this country feel the same way.
The Crown corporation provides financial and business services to the Canadian agriculture industry. With a portfolio that tops $21 billion, the FCC returned a dividend of over $17 million to the federal government this past fiscal year.
Speaking at the FCC annual public meeting at the Alma Community Centre on Aug. 15, CEO John Stewart said Canadian farmers are also doing well, and optimistic about their prospects,
“We surveyed 4,500 producers last year and 80 per cent of them said that they believe that their farm or agribusiness operation will be better off in five years than it is today, so they’re optimistic about their future. And just about that same percentage believe that they are better off now than they were five years ago,” he stated.
Stewart told about 40 people who attended the meeting the FCC can tell from the applications it receives that farmers and agri-business operators have a desire to expand their businesses, and are confident about the industry.
Stewart said there are several reasons to feel optimistic about Canadian agriculture, including booming prices in most commodities.
“Commodity prices are awful good right now, so those prices are helping to fuel profitability and optimism for the future.”
Low interest rates and rising asset values are among the other pillars helping keep the industry stable and strong, Stewart said, pointing out that farmland prices in Ontario have increased 14 per cent in the past year alone.
While he said a combination of low interest rates and high commodity prices are creating a boom throughout much of the agriculture sector right now, Stewart believes farmers are also preparing themselves for the inevitable swing of the pendulum.
“Interest rates won’t stay this low forever. We know that. They will eventually increase and people need to be ready and plan their operations for that increase. We believe, in the customers that we see, that they are.
“They also need to plan that commodity prices won’t be this high forever, and we think they are doing that as well. So they’re seizing opportunities and expanding at a time when they think it makes sense for their family and their business.”
Recognizing the cyclical nature of the industry, the FCC’s strategy is to provide farmers with the financial tools they need in boom times, or bust.
When times are good, the approach is simple, says Stewart.
“Lending them money, I guess for the most part. Last year we lent a record $7.1 billion into the industry in Canada and that’s all to producers and agri-business operators who are planning on expanding their operation.”
When the economy turns tough, Stewart says the FCC activates “customer support strategies” to help farmers stick around for the next good year.
Members of the FCC’s board of directors and executive management team from across the country attended the meeting and spent several days in the area, touring facilities such as the Ontario Agricultural College in Guelph, prior to the public meeting.
