Plus c’est la même chose? Questioning crop diversification as a response to agricultural deregulation in Saskatchewan, Canada

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Abstract

In the context of declining government subsidization of agriculture, many analysts have predicted reversals in certain characteristic trends of post-1945 Western agriculture with positive implications for agroecosystem well-being. One example, investigated herein, is the suggestion that, in the absence of government safety nets, farmers will seek to diversify their operations in order to buffer against production failures or market downturns in any one output. Such a shift is not only consistent with agricultural risk-management theory, but also, at first glance, early ‘mirror image’ conceptualizations of post-productivist agriculture; if (output) specialization has been an observed trend of productivism, then (output) diversification should be the trend of post-productivism. In fairness, however, where diversification has been identified as a manifestation of post-productivism, it has usually implied the development of largely non-agricultural activities that supplement household income. Clearly, a clarification of meaning is needed, and this paper offer some suggestions for doing so. Additionally, crop data from Saskatchewan, Canada are analysed for the years 1994–2000 to determine the degree to which arable producers there have sought to diversify their operations following the loss of an historically and financially significant export subsidy. Given limited evidence of diversification at the level of individual farms, the maximum scale at which crop diversity has any significance in ecological terms, a discussion follows of the various limitations to adopting an output diversification strategy to manage market and other risks, and the likelihood of farmers further pursuing output specialization in an era of reduced government support and increasingly chaotic commodity markets.

Introduction

This paper contributes to a growing body of scholarship that questions the postulated end of certain characteristic trends of post-1945 Western agriculture as a result of, or perhaps in tandem with, recent changes in economy, society and governance (see Morris and Evans, 1999; Hoggart and Paniagua, 2001; Wilson 2001). Its empirical focus is crop diversification, or more precisely the degree to which individual farmers in an agricultural region noted for its specialized cropping patterns have recently shifted towards more diverse ones in the context of a historically and financially significant policy change that mirrors broader shifts in the regulation of agriculture in the West.

While the 2002 United States Farm Bill and the seeming intransigence of the European Common Agricultural Policy (CAP) might suggest otherwise, government support to farmers in much of the developed world has declined significantly over the past decade or so (OECD, various years). For example, in the mid-1980s, aggressive and lasting agricultural policy reforms were implemented in Australia and New Zealand. Indeed, current levels of subsidization in New Zealand equate to no more than 1% of total farm receipts. Although less severe in both the speed of enactment and degree of change, North American producers experienced notable reductions in support in the 1990s. In the case of Canada, support declined from 49% of farm receipts in 1990 to just 14% by 1997. Even in Europe, the termination of input subsidies and the reduction of price and export supports stemming from the 1992 MacSharry Reforms to the CAP has led to lower overall levels of support.

In light of this decline, whether realized or anticipated, increasing scholarly attention has been directed towards identifying the implications of agricultural re/deregulation,1 and market liberalization more generally, for farm-level production practices and the condition or well-being of agroecosystems (e.g. Abler and Shortle, 1992; Anderson, 1992; Bredahl et al., 1996; Krissoff et al., 1996; Bradshaw and Smit, 1997; Antle et al., 1998; OECD, 1998; Potter and Goodwin, 1998; Redclift et al., 1999; Winter, 2000). A common belief within much of this literature, reflecting what Marsden (1998) terms the ‘neoclassical option’, contends that by reducing overall support levels and decoupling remaining support from production decisions, farmers are compelled to make more efficient use of costly inputs like agrochemicals and, more generally, reduce the intensity of their operations, which together can be expected to result in less environmental degradation.2 Additionally, and of relevance to this paper, some analysts have explicitly predicted (e.g. Terrestrial and Aquatic Environmental Managers, 1992; Rosegrant et al., 1995), while others have implied (e.g. Abler and Shortle, 1992; Potter and Goodwin, 1998), increased output diversity at the individual farm scale. Interestingly, similar intimations have been expressed within early conceptualizations of post-productivist agriculture beyond the specific context of agricultural policy reform (e.g. Ilbery and Bowler, 1998). From an environmental perspective, agricultural operations comprised of a greater diversity of outputs are thought to have a more benign impact upon regional ecosystems. Support for this assumption derives from the identification of, for example, reduced pesticide and fertilizer use, and improved soil nutrient balances in such systems (see Altieri, 1987; Gliessman, 1990; Paoletti et al., 1992). Hence, projections of output diversification under deregulation are welcomed by those seeking more environmentally sustainable forms of agriculture.

This paper assesses this projection based on evidence from Saskatchewan, Canada. As the historical centre of wheat production in Canada and an important contributor to world wheat supplies,3 Saskatchewan's agricultural landscape has taken on many of the key characteristics of productivist agriculture, including output specialization. However, owing to recent policy changes in Canadian agriculture, and the Prairies in particular, Saskatchewan's arable producers have entered a new regulatory era. The key change was the 1995 termination of the Western Grain Transportation Act (WGTA), a century old export subsidy for producers of grains and oilseeds. This change came in addition to the discontinuation of a commodity-based revenue protection program, the Gross Revenue Insurance Plan, in the same year. How thousands of arable farmers in the province are responding to these new conditions, especially with respect to cropping patterns and diversity, is a question of particular interest to Canadian agricultural officials (see Agriculture and Agri-Food Canada, 1998) and those concerned with the environmental implications of agricultural deregulation.

The paper proceeds in four parts. First, the various forms and definitions of diversification adopted in the literatures on agricultural policy, agricultural risk-management, agricultural/rural restructuring and post-productivist agriculture are reviewed in order to clarify its meaning, especially as used by those projecting increases in the future. In Section 3, the history of Canada's WGTA is outlined as a prelude to, and context for, an analysis of crop data for a sample of roughly 10,000 Saskatchewan arable farmers for the period 1994–2000 that reveals the degree to which these operators have chosen to diversify over that time. Given the limited evidence of crop diversification in the Saskatchewan case, a discussion follows of the various limitations to adopting an output diversification strategy to manage market and other risks, and the likelihood of farmers further pursuing output specialization in an era of reduced government support and increasingly chaotic commodity markets. Lastly, certain conclusions are drawn.

Section snippets

Forms and definitions of diversification

While the causal links are complex, the subsidization of agriculture by governments over the past half-century is thought to have encouraged a trend towards output specialization at both the regional and individual farm scales (Bowler, 1985; US National Research Council, 1989). In particular, it is argued that the provision of commodity-specific price support and publicly funded crop insurance has directly promoted and indirectly enabled the widespread adoption of a strategy of expansion and

Cropping patterns and diversity in Saskatchewan, 1994–2000

The historical roots of the WGTA can be traced to a 1897 deal between the Canadian federal government and the Canadian Pacific Railway, popularly known as the Crow's Nest Pass Agreement. The agreement provided the railway with a construction subsidy to extend their network from southern Alberta west to the Kootenay Valley in British Columbia through the Crow's Nest Pass in exchange for a freight rate ceiling on export grains heading east to the port of Thunder Bay. These fixed rates were later

Discussion

In contrast to certain intimations, speculations and/or specific projections, individual arable farmers in Saskatchewan do not appear to have pursued a strategy of crop diversification following the loss of an historically significant export subsidy. Is this result truly surprising? While conventional risk-management theory might identify crop diversification as a means of managing the production and marketing risks associated with arable operations, decisions to significantly alter cropping

Conclusions

While inconsistent across regions, agricultural producers in the West have generally experienced a notable decline in state financial support over the past decade or so. For advocates of policy reform, such as the OECD (1998), a purported added benefit of deregulation is its environmentally favourable impact on farm-level production decisions. Not only are farmers expected to reduce the intensity of their operations, but some analysts have explicitly predicted, while others have implied, a

Acknowledgements

This research was supported through fellowships from the Social Sciences and Humanities Research Council of Canada and Simon Fraser University. Additionally, the author gratefully acknowledges the cooperative efforts of Statistics Canada and Iain Wallace, the research assistance of Audric Beauchesne and Evan Fraser, and the editorial advice of Chris Cocklin, Barry Smit and two anonymous reviewers.

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