It is an undisputed fact that Canada’s farms, both large and small are disappearing at an alarming rate. The average age of Canadian farmers is increasing, the cost of "doing business" is definitely growing and the price tag on existing, operating farms is out of reach of all but a few.

In April, 2009 the DFO ( Dairy Farmers of Ontario) announced a program to help bring new dairy farmers on board. The offer of a loan of quota for up to eighteen years, to a maximum of 12 kilograms per new entrant was warmly received by many.

On May 1, 2009 the Federal government announced changes to the Farm Improvement and Marketing Co-Operative Loans Act designed to encourage new farmers. Previously new operations were exempt from this program which, among other things, guarantees loans and thus more favorable interest rates, for the purchase of land, equipment and improvements to already operating farms. Quota for any of Canada’s supply managed commodities is not included in the list of eligible purchases. But, by adding new farmers to the eligibility list, they too are giving a helping hand.

The question is, though, do either of these programs really help bring a viable new farmer on board or is he doomed to financial failure from the start?

In the past we have spoken to several fellow dairy farmers who, like us, have children wanting to buy into the operation. If one does the paper work realistically and honestly, it doesn’t take much figuring to realize that the costs of starting up a new, stand-alone operation is still phenomenal, even with the loan of quota and the FIL changes.

To purchase even just a barn, milk house and manure storage area, all of which must conform to existing statutes, along with a few acres of "buffer" from the non-farming neighbours, puts the loan figure in the six digit area. Plus, a written contract for spreading the manure off the new farm would be required. Buying additional land to spread the manure and growing ones own feeds adds, again, a six place figure loan. Allowing for the hay/ silage/ feed to come from the parent’s operation at cost might be cheaper but still adds on large expenses for both. Borrowing equipment from the home farm is an option, rather than buying it either new or used, but it also puts extra acres on the pieces, reduces their life span and means sooner, rather than later, replacement costs for the family farm. One assumes the 25 to 30 milking cows would be a "gift" to the new farmer. If not - add more money.

Then we have the quota. To be loaned 12 kilograms for up to 18 years, the new entrant has to buy 12 kilograms at an approximate cost of almost $300,000. These six digit figures are piling up, as is the nest egg the young farmer must arrive with. Most loans are for only 80% of the cost! How many young men or women can carry such a large initial debt along with the stress of operating a new, unknown farm? Not many.

It would seem that the DFO’s new entrant program should be quickly reassessed and a retake done along the lines of the Quebec system where children on existing dairy farms can be loaned 5 kilograms of quota to allow them to "buy in" to the family operation. These are the "new’ farmers which the industry really needs as they are the ones who have the knowledge, know-how and experience of operating farms in Canada. They were born into it and it is they who carry the hopes of Canadian agriculture.