At many meetings that I attend across the country, there are hallway discussions that include someone saying, “why do we have so many farm groups?” It’s a question that we will likely hear more often as time goes on.
This is not the same as questioning the value of farm groups (they are valuable!), this is a question of whether the number of them still parallels the realities of the day. I believe strongly in the purpose of farm groups and why they exist. I can name many examples where farm groups were the driver of a solution being found because of efforts of farm group lobbyists. Additionally, farm groups facilitate research funding and are one of the custodians of research dollars being directed to the right projects.
The background
Traditionally, we have had farm groups that represent a commodity or sub commodity within each province. For example, Alberta Beef Producers, Chicken Farmers of Ontario or the PEI Potato Board. Most of these groups are funded through levies or check-off funds related to the production of the commodity. The collection of those monies is provincially regulated, which keeps these groups in a provincial lane. Similar commodities work together across provincial borders through groups such as Cereals Canada, Grain Growers of Canada, or the Canadian Cattle Association.
There are also some groups that form across provincial lines designed to target specific demographics of farmers. These organizations are membership-funded, and don’t rely on provincially-regulated check-offs for funding. Examples include the Western Stock Growers Association or Western Canadian Wheat Growers Association.
As we saw Sask Wheat and the Saskatchewan Winter Cereals Development Commission decide to pursue amalgamation this week, the Alberta Wheat and Barley commissions are also merging. Grain Farmers of Ontario was formed in 2008, and the Manitoba Crop Alliance brought five provincial commodity groups together in 2020. There are multiple examples of farm groups merging for a number of reasons. The question is, will there be more? There are reasons that the answer will be yes.
What are the drivers?
- Industry and farmers themselves are consolidating, why not farm groups?
- There has been massive consolidation in several verticals of the industry that produce products and services for farmers. Additionally, farms across Canada continue to get larger due to consolidation and reduction of the number of farmers. It is difficult for farm groups to buck this trend and hold a unique resistance against the forces of consolidation.
- Difficultly in finding enough board members
- Due to the above point, the amount of board seats to fill within organizations has become increasingly difficult — there are just fewer farmers each year. One of the short term solutions of this has been to reduce required board seats or recycle people through boards as they “graduate” from one to the other.
- Cost savings to farmers/check-off dollar efficiency
- We have seen some groups take the interim step of sharing staff across organizations, which is meant to rationalize costs. On the flip side, multiple products under one umbrella can create the opportunity for check-off efficiency due to reduced resources required per dollar of check-off collected. The counter to this is that instead, staff numbers can balloon to manage the added scope, but that is a strategic or operational decision of the farmer board of directors. With the amount of common members across combined organizations groups should be able to achieve better check-off efficiency and lower costs with consolidation. Synergistic cost saving is one of the reasons corporations search out mergers, for example.
- Not only is there member overlap, but there is issue overlap as well.
- Although an organization can have unique files specific to their region or crop, it is much more common that those files are common across several organizations within a province or outside the province. For example, water management, trade issues, or regulatory hurdles.
- There are examples it can work already in the market
- The Grain Farmers of Ontario is an example that a major amalgamation can work. Initially it was the combination of wheat, corn and soybeans and now includes several minor use crops (oats and barley) as well. Recently the Manitoba Crop Alliance was formed to represent most crops in Manitoba, except for canola and pulses.
There will be resistance
No doubt there is more low hanging fruit out there, but it will get tough quick as larger, more-established groups consider amalgamation. Whether it’s similar-sized organizations or a mixture of sizes, farmers want to make sure that their specific commodity is fairly represented. I remember this being a major discussion at the time that the Grain Farmers of Ontario was formed. They recognized it and hired a CEO from outside all of the three groups to remove the perception of favouritism.
I also do not think that this is a fast process at all. Time will chip away at this issue as the above listed forces work their way through the organizational bodies.
It’s a natural human condition for change to be hard and there to be resistance, no matter the benefits provided. There are strong traditions and relationships within many farm groups across this country. Tradition is a hard thing to change, especially in agriculture, but over time, there are reasons to expect we will see fewer farm groups than we have today.