Despite the financial pressures facing farmers last year, federal records show that BCâs farm businesses remained solvent even as input costs and interest rates rose.
A sector-by-sector breakdown of the 3,402 business insolvencies reported by the federal Office of the Superintendent of Bankruptcy last year indicated that agriculture in BC remained in good health.
While many farms have been under pressure, the data suggests that many found ways to navigate the issues.
This was in stark contrast to other business sectors, which collectively saw business insolvencies increase 37 per cent last year versus 2021.
According to the Canadian Federation of Independent Business, many businesses have yet to see their sales return to normal while others are struggling under the weight of federal loans that helped carry them through the pandemic. The combination of low sales and debt repayment obligations has pushed them to the brink.
While the province refrained from asking farms to provide proof of income during the pandemic in order to obtain farm class status, 2020 saw three farms declare insolvency. These included two vegetable growers and a grain farmer.
This compared to a single hay farmer in 2018 and one vegetable grower in 2019 and represented the majority of the five insolvencies in the provinceâs agriculture sector over the past five years.
However, CFIB president and CEO Dan Kelly told Canadian Press that just because businesses arenât declaring bankruptcy doesnât mean theyâre okay.
He said that for every business that declares insolvency, nine shut down in an orderly fashion.
The most recent federal Census of Agriculture reported a 10% decline in the number of farms province-wide between 2016 and 2021.
The decline in the number of farms corresponded with an increase in average farm size. Many farms that shut are consolidated either in whole or in part within larger, better-capitalized operations.