Farmers have to deal with rain, bugs, sun, etc Commodity prices impact a farmer ability to sell his product The liberals have come to office as such have imposed more tax and regulations on the family farm Canada has a supply management system that manages quota. Canada has open up dairy, poultry, etc to foreign imports via TPP, CETA and USMCA agreements. Farmers are looking for price support as part of the expansion of imports into Canada

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Farming and
Profitability -
Canada
Paul Young CPA,CGA
May 28, 2019

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Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4 and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Financial Solutions
• SME – Business Process Change
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

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Agenda
 Farm Income – 2016 and 2017
 ON and PQ
 New Tax Policy and other Costs – Liberal Government of Canada
 Acreage value
 Subsidies
 Vertical Farming
 Expert Farming
 Summary

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Farming Summary
 Farmers have to deal with rain, bugs, sun, etc
 Commodity prices impact a farmer ability to sell his product
 The liberals have come to office as such have imposed more tax
and regulations on the family farm
 Canada has a supply management system that manages quota.
Canada has open up dairy, poultry, etc to foreign imports via
TPP, CETA and USMCA agreements.
 Farmers are looking for price support as part of the expansion of
imports into Canada

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Farm Income – 2016, 2017 and
2018
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/180528/dq180528a-eng.htm

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Farm Income – 2017 and 2018
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/190528/dq190528a-eng.htm
• The realized net farm income of agricultural producers
fell 45.1% in 2018 to $3.9 billion, the largest percentage
decrease since 2006. This followed a 2.8% decline in
2017. Realized net income is the difference between a
farmer's cash receipts and operating expenses, minus
depreciation, plus income in kind.
• Rising feed, interest and labour costs together with little
change in farm cash receipts pushed realized net farm
income lower.
• Realized net income fell in every province except New
Brunswick (+7.2%) where an increase in cannabis and
potato production boosted receipts. More than one-third
of the national decrease was attributable to a 68.1%
decline in Alberta.

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Small Business Tax Change / Farm and other Issues
Source - https://www.canadianpoultrymag.com/business-policy/farm-business/the-
evolution-of-tax-changes-for-the-canadian-farm-business-30601
• Ontario farmers struggle with changes to
labour laws and high hydro rates -
https://nationalpost.com/pmn/news-
pmn/canada-news-pmn/farmers-in-
southwestern-ontario-lament-high-hydro-
rates-increased-labour-costs
• Carbon Tax and Farming costs -
https://www.realagriculture.com/2018/01/will-
a-carbon-tax-negatively-impact-the-
competitiveness-of-canadian-farms/
• High fuel costs -
https://www.reuters.com/article/us-usa-fuel-
farming/farmers-worldwide-struggle-with-
rising-fuel-costs-idUSKCN1IJ0CR
• Crop Insurance - https://www.country-
guide.ca/2018/01/03/why-canadas-farmers-
need-better-risk-management-
programs/52294/
• Cost of Capital - https://www.fcc-
fac.ca/fcc/knowledge/ag-economist/farm-
assets-and-debt-report-2017-18-e.pdf

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Acreage value
Source – Stats Canada

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AG Subsidies
 https://www.nationalnewswatch.com/2018/06/18/canada-can-end-dairy-trade-dispute-with-u-s-by-
ending-pricing-irritant-saputo/#.WyjfZKdKhPZ

 I agree Canada should review its agricultural support, but so should the USA. USA provides over
$20B per year in subsidies. Where is Trudeau on USA subsidies?
https://www.slideshare.net/paulyoungcga/agriculture-sector-food-pricing-june-2018
 USA - https://www.canadianmanufacturing.com/exporting-and-importing/trump-tapping-us12b-to-
help-farmers-affected-by-tariffs-216532/
 Agriculture sector - https://www.slideshare.net/paulyoungcga/agriculture-sector-subsidies-and-
food-prices-july-2018

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Market Potential
 Source - http://www.prnewswire.com/news-releases/vertical-farming-market-size-worth-99-billion-by-2025--cagr-224-grand-view-research-inc-620578263.html
The global vertical farming market is anticipated to reach USD 9.9 billion by 2025,
according to a new report by Grand View Research, Inc. The increased use of
Internet of Things (IoT) sensors, for producing crops, is likely to spur the market
demand over the forecast period. The information obtained from the sensors is
stored on the cloud and analyzed to perform the required actions. The growing
automation in agriculture and increasing use of big data & predictive analytics, for
maximizing yields, are also likely to drive the market.

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Pitfalls to Vertical Farming
Source - https://www.maximumyield.com/top-3-reasons-why-vertical-farms-fail/2/3177
1. They try to do too many things at once. - A common pitfall of many vertical farms is attempting to
both grow food for market while productizing and selling the technology they’re using to grow their
food.
2. They forget that labor is always the biggest cost. Reflecting on their own shuttered operations,
each of the three panelists echoed this warning about labor: Don’t overlook your labor costs. All
three panelists express similar challenges regarding the workers on their respective farms. While
the wages were relatively low (ranging from $9-15 per hour), labor costs added up quickly thanks to
the farms’ growing techniques
3. They don’t treat the farm like a process. - In today’s technology-based modern farming world, production is
not the problem. Growing in controlled environments and with proper plant nutrition allows modern farmers to
produce crops with astounding consistency and quality. Instead, the real issue these three farmers faced was
how to run their growing operations efficiently while minimizing cost.

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IOT Market Leaders
 http://www.fox34.com/story/35300702/global-internet-of-things-iot-market-2017-size-share-
development-status-type-and-application-segmentation-forecast-by-2023

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Companies / Vertical Farming
Source - https://globenewswire.com/news-release/2017/05/17/986832/0/en/Vertical-Farming-Market-to-exceed-13bn-by-2024-Global-Market-
Insights-Inc.html
Market Leaders
• General Hydroponics
• Aerofarms
• Plantagon International AB
• Urban Crop Solutions
• Sky Greens, Green Spirit Farms,
• Spread co Ltd
• Mirai Co.Ltd.
• American Hydroponics etc.
OEM Equipment:
• EVERLIGHT ELECTRONICS
CO., LTD (Taiwan)
• illumitex (Texas),
• Koninklijke Philips NV
(Netherlands).

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Analytics and Farming
 Smarter Farming -
https://www.ibm.com/blogs/research/2018/09/smarter-farms-
agriculture/
 Big Data and AI - https://www.ibmbigdatahub.com/tag/2696
 AI - https://www.nasdaq.com/article/ai-and-farming-how-ibm-is-
bringing-cuttingedge-technology-to-one-of-the-worlds-oldest-
industries-cm1024154

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Summary
 Farmers are being hammered by carbon taxation -
https://www.producer.com/2018/10/farmers-unhappy-with-feds-
carbon-tax-plan/
 Farmers were against the small business tax reforms -
https://www.producer.com/2019/03/new-taxes-will-affect-
farmers-and-business-owners/
 Farmers want a government at all levels to work with them to
ensure tax fairness as well as their farms are not over regulated.