But What If It Is? – A blog on conspiracy theories in agriculture

I love a good conspiracy theory. From the JFK assassination to the Titanic sinking, and even to wondering if we are alone in the universe. I don’t take them all seriously, but I have an open enough mind to consider the possibilities. Plus, I am highly analytical, so until I have concrete proof,  nothing is absolute.

 

This got me thinking about the conspiracy theories in agriculture. I think it is time for an open discussion about those things that show up in my social media feed, or the rumour mill that sometimes catches steam, no matter how far-fetched.

 

Nobody Succeeds Alone

 

This may be the one I love the most. 

 

In agriculture, we find it increasingly hard to believe that others can accomplish something that we have not determined for ourselves. Over the years I have heard that growing farms are only growing due to outside investment. This could mean shady deals, equipment dealerships or retail intermediaries, just down to making a deal with the devils in the big city. I don’t know the inner workings of every farm across Western Canada, but I do know a lot of the larger enterprises close by. And this one always makes me laugh.

 

Outside investment will always be a discussion in agriculture. We know it exists because we know who the largest landowners across the country are (and most are not farmers). Every time a farm purchases a big parcel of land it does not mean they need help. A $20M purchase only requires $4M down and at $5K an acre that is 800 acres. 

 

Is it far-fetched to believe that a farm could not have 800 acres free and clear? 

 

The debt servicing is another discussion but if the farm already has strong profits over the remainder of their acres, then servicing an additional $20M of debt payments is not as hard as you think. Growing up, 500-acre purchases were large, now anything under 3,000 doesn’t get my blood flowing.

 

We need to get over the judgement on this. 

 

If the option is to utilize outside investment to allow yourself to grow, or lose the land entirely because you cannot do it yourself, which would you choose? Too often we negatively shun those that need others’ assistance to grow, but is an outside investor any different than a National Bank owing your land? The trade-off is future equity or current cash interest expense. 

 

Demographics of Primary Producers

 

I have probably added to this theory through my public speaking. The hard facts are that the average age of a primary producer in Canada is around 60 years of age. For the normal population, this is retirement time, but for most farmers, this is just getting started (sarcasm that holds a scary truth). 

 

The conspiracy theory here is that we are about to see the largest transfer of land between generations that has ever occurred in agriculture across not only Canada but globally. The baby boomer generation has entered the stage of life that creates a slowdown (whether chosen or not), and what happens when the coming generations are nowhere near the same size?

 

One theory is that we see a mass exodus of farms. Land appreciation has created multi, multi-millionaires for most farmers overnight. To assume that they will not cash out and either spend or leave this wealth to the coming generations would be a little foolish. I believe that this is closer to reality than we think and that this could lead to a drop in land prices or just a very large surplus in acres that there may not be enough access to capital financing to cover. I believe you may see more rental or joint venture agreements than ever before in the coming decades.

 

On the other side, farms have more wealth and cash than ever in history. Since the pandemic, we have seen some of the highest prices in history for grains and the largest land appreciation. This has made almost every farm a viable option for expansion. With this type of wealth, the assumption is that land prices and sales don’t slow, and this also has been a truthful statement based on the number of deals I have run in the past two years. I don’t have many clients that have not expanded or are looking to expand right now. This is exciting, but it also lies truth in land prices continuing their healthy assent. Only time may tell.

 

The Reason to Stop

 

Whether it is the belief that agriculture is “different”, or just the fact that somebody cannot understand leaving the lifestyle. When a farm closes shop, I love to watch the rumour mill. I can remember when my largest client and friend decided to move on from farming, it went from dying of an illness to bankruptcy to divorce. I knew the real reason but watching people flounder, especially in today’s world of transparency and opinions on social media, was one heck of a time.

 

When people make the decision not to farm, sometimes it is by choice. We have seen those who couldn’t make ends meet and move on to different jobs, but not everybody as I have heard “chose to farm”. Sometimes, it chooses them which makes this theory entirely open to interpretation. 

 

In an industry where farms often barely have cash in the bank account but are sitting on millions of dollars in real estate and equity, is it too far-fetched to believe they just cashed in? 

 

Is it hard to assume they wanted to invest in other ventures and set their children’s children up for their lives? This in some ways is more believable than continuing to pinch pennies and fight the weather as a producer.

 

My honest opinion is that in many cases people judge because they wish they could follow. We have made the family farm so sacred that individuals believe that they will lose their parents and family if they ever choose something different. However, I have had numerous discussions with realists who treat the farm like a business and understand the goal is returns, retirement, and future wealth. Not everybody wants to die on the family farm.

 

In the end, I could probably go on for many more pages. I haven’t even touched on the government and their true goals and vision for agriculture (food supply, control, etc). That’s for another day. But I would love to do something different and ask the reader what conspiracy theories they have around agriculture and to leave a comment on our social media so that we can discuss it in our podcast “The Truth About Ag”.