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Archive for the ‘Succession Planning’ Category

Defining Sustainability

Sustainability is a holistic, long-term approach to business.  It maximizes the economic and environmental stability, equity, and health of the farm, business, and family.

A sustainable approach to farming is more than talking about environmental actions or maximizing profits.

Sustainability focusses on business processes and practices, rather than a specific food, fibre, or feed output.  It integrates economic, environmental and societal values to create a Triple Bottom Line (i.e. understanding and accounting for three “bottom lines”: economic, social, and enviornment, instead of simply looking at a cash flow analysis for actions in your operations).  This is very different from a purely profit-driven approach, where businesses benefit economically, but often at the expense of the environment and society.

Agricultural Context

Sustainable Agriculture is…

“the efficient production of safe, high quality agricultural product, in a way that protects and improves the natural environment, the social and economic conditions of the farmers, their employees and local communities, and safeguards the health and welfare of all farmed species.” (Sustainable Agricultural Initiative Platform, 2010)

There is a growing global demand to increase sustainability in agriculture.  What this means on-farm differs depending on where the farm is (the Place), what the farm produces (the Product), and where the product is sold and for what price (the Price). Regardless of what is purchased, grown, or sold, there are broad perspectives that can increase the sustainability of every agri-business by addressing the TBL of economic profitability, environmental stewardship and social responsibility.

Consumers are increasingly concerned with how their food is grown and processed.  The single largest share of impact within the supply chain is the food production itself. Food processors and retailers need long-term and ever-increasing supplies of quality raw materials. Unpredictable weather extremes and global water scarcity make agricultural production and food processing more volatile.  Sustainable practices help ensure businesses along the entire supply chain have reliable sources of product.  At the same time, reliability creates new opportunities for enhanced branding to meet consumer demand.  Sustainable sourcing is a point of differentiation in the marketplace.

While these components are discussed separately below, their goals overlap; impacting and influencing each other.  For example, economic decisions will impact the environmental and social components; the environmental actions taken will impact the economic output and social well-being.

Economic Profitability

To be sustainable, a farm must be economically viable.  While the environmental and social pillars of sustainability may not always translate into immediate economic profit, sustainable practices will have a positive economic impact on the farm.

For example, the diversification of crops can help reduce financial risk.  Over time, diversification of crops can reduce financial risk while improving water quality and increasing other environmental benefits that raise the value of the farm itself.

These factors must be taken into consideration when managing a farm business.

Production and machinery costs are directly affected by sustainable practices.  Fertilizer and pesticide applications can be applied responsibly and, in some cases reduced, based on crop rotation, variety selection or market availability for end-product.  Sometime overall yield may decrease, but differences between production cost and revenue can be improved, leading to increased profitability for the farm.  Likewise, management, marketing skills, and experience of decision-makers will have direct economic effects on the business.

Indicators of your farm’s economic profitability may include:

  • increasing net worth or savings,
  • debt is consistently decreasing, and/or,
  • farm is consistently profitable year after year.

Environmental Stewardship

Stewardship is a familiar concept to farmers.  For many, this is what comes to mind when they think of sustainable agriculture.  Environmental stewardship uses ecologically-sound practices that have a neutral or positive impact on the natural resources and non-renewable resources used on-farm.  It can mean reversing damage that has already occurred, like soil erosion or draining of wetlands.  It can also be enhanced by taking steps to prevent the future degradation of land and water resources through conservation practices, like:

  • naturalizing riparian zones,
  • using smart cattle watering practices,
  • establishing proper cover crops.

These are factors that have direct impacts on your cost of production and economic profitability components of sustainability.

Another key to successful environmental stewardship lies in soil health.  Maintaining adequate soil organic matter, biological activity and nutrient balance are essential to feed crops in the long-term production of the business.

There are many ways to enhance soil fertility and improve soil health, such as including legumes in crop rotation, using manure or compost instead of and /or in complement to synthetic fertilizers, and maintaining a working knowledge of the fertility of the fields so as to properly manage them.

Other stewardship concepts include:

  • protecting water quality,
  • year-round soil cover (residue or cover crop),
  • integrating crop and animal systems to maximize efficiencies, nutrients and energy,
  • controlling invasive plants.

Some traditional practices conflict with sustainable practices, because they severely damage the soil structure and resiliency of a field to adapt to extreme weather events, climate change, and the stresses of intensive crop production.

All practices, new and traditional, must be considered when implementing sustainable farming practices.

Social Responsibility

Social responsibility relates to the quality of life for everyone who interacts with the business: employees, customers, neighbours, local community members, and the farmer.  The most prominent examples of this in rural Ontario are agricultural cooperatives, farmers’ markets, on-farm events and twilight tours.  Other examples occur within the business itself, like fair treatment of workers and good business practices.

Some indicators of social responsibility include:

  • support for other local businesses and families within the community, circulating money within the local as well as the global economy,
  • the rural community population is stable or increasing,
  • post-secondary school graduates return to the community after graduation, to succeed on family farms or with associated businesses.

Summary

Sustainable agriculture is defined by three interactive components: economic profitability, environmental stewardship, and social responsibility.  It is important that sustainability is embraced at all levels; farm practices can have compound impacts across the entire supply chain in very complex ways.

Sustainability is a goal. However, a farm should never expect to “achieve sustainability”.  As farm practices become more sustainable, farmers gain a deeper understanding of the natural resources they steward and how this affects their business.

A competent working knowledge of sustainability creates further opportunities for new sustainability practices.  This in turn increases the farmer’s ability to respond to market pressures and environmental conditions, and help develop a robust and resilient business. The profit in sustainable practices is both tangible and intangible. It includes economic gain, environmental stability and social benefit.

Sustainability, like our seasons, is a never-ending journey, which is why it is so important to continue to work towards this goal.

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At the beginning of May 2016, Canadian farm operators will have the chance to take part in a national dialogue by completing the Census of Agriculture questionnaire.

The Census of Agriculture is the definitive source of community-level data. By drawing on these data, decision makers will know that they are acting in the interests of farmers, farm communities and agricultural operations across Canada.

Farm organizations are heavy users of census data and draw on this information when formulating policy requests, producing communication and outreach work, and conducting market research.

What’s new for the 2016 Census of Agriculture?

Census by Internet: fast and easy

All Canadian farm operators will receive a letter at the beginning of May 2016 with instructions on how to quickly and easily complete the questionnaire online.

The online questionnaire will automatically add totals. As a result, completing the questionnaire online will limit the questions to the ones that apply specifically to an operator’s farm and will reduce the need to call back farm operators in order to clarify answers. On average, farmers should spend 30% less time responding to the 2016 Census of Agriculture than they did responding to the previous census (2011).

Shorter—but still comprehensive—questionnaire

The Census of Agriculture staff consults after every census with farmers, agricultural industry members, and data users for the purpose of assessing data needs.

Statistics Canada has received more than 200 submissions from diverse groups, including federal government departments and agencies, provincial ministries, farming organizations, academics, farm service companies, and consulting firms further to the 2011 Census of Agriculture. Statistics Canada is grateful to the agriculture industry for its ongoing feedback and support.

As a result of these consultations, most of the questions for 2016 are identical to those used in 2011. This continuity is important when it comes to tracking long-term trends in the industry and meeting the ongoing needs of users and stakeholders.

In the 2016 Census, operators are no longer required to provide detailed farm expenses and other information such as place of residence, details on irrigated land, and the source and use of manure.

The questionnaire also includes new questions on the adoption of technologies, direct marketing, succession planning and renewable energy production.

Overall, the 2016 questionnaire has 18 fewer questions than did the 2011 questionnaire.

The content of the 2016 Census of Agriculture was published in the Canada Gazette on June 20, 2015.

Getting ready

In the coming months, the Census of Agriculture Program will begin its communication and outreach work with the farming community. This work includes farm show exhibitions, as well as a media campaign that explains what’s new in the upcoming census and why the census is important.

By law, farmers are required to participate in the Census of Agriculture. By the same law, Statistics Canada is required to protect the information provided in Census of Agriculture questionnaires. Privacy is a fundamental component of the census.

At the beginning of May, complete your questionnaire and tell your story as part of Canada’s farming community!

For more information, please visit the Statistics Canada website.

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Seeds for Success: Enhancing Canada’s Farming Enterprises

The Conference Board of Canada, 61 pages, June 2013

Report by Erin Butler, James Stuckey

The modern farming landscape is changing. This report considers the state of farming business in Canada, and how it can be improved to achieve greater economic and social value.

Document Highlights

Farming in Canada has deep roots and traditions, but the sector undergoes significant changes: the old ways of doing things are no longer guarantors of success. Seeds for Success: Enhancing Canada’s Farming Enterprises explores the modern realities of farming business, and how it can be bolstered to achieve even more of the economic and social value that consumers expect. The report reveals that Canada’s farming sector is increasingly dynamic, presenting new opportunities, as well as risks and challenges. Although farmers have long been skilled at managing the growth of crops and livestock, they must now also be increasingly skilled at managing their businesses. This report considers the farm management issues facing farming today.

More details and to download the report>>

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Guelph, ON, June 26, 2013 – The Agricultural Adaptation Council (AAC) is accepting applications from Ontario organizations and collaborations that want to put innovative ideas into action by growing profits, expanding markets and managing risk under Growing Forward 2 (GF2).

GF2 offers funding assistance for:

  •  Capacity building through strategic planning, training, audits or assessments, and,
  • Project implementation that focuses on the environment and climate change, animal and plant health, market development, labour productivity enhancement, assurance systems, and business and leadership development.

“Created with a ‘client-first’ approach, the GF2 program is suited to meet the individual needs of a very broad industry,” said John Kikkert, AAC Chair. “Applicants have the flexibility to propose projects based on their own priorities within the GF2 focus areas. This is ideal for an industry that faces many challenges, and has many diverse opportunities.”

AAC is delivering GF2 programming to Ontario organizations and collaborations on behalf of the Ontario Ministry of Agriculture and Food and Agriculture and Agri-Food Canada. Pre-proposals, applications and program guides can be found on the AAC website at www.adaptcouncil.org.

Enrollment and online applications are available through the GF2 Client Portal.

The AAC is based in Guelph, Ontario, Canada, and is a leader in program delivery. The AAC is a not-for-profit organization that is made up of 67 Ontario agricultural, agri-food and rural organizations. The AAC board of directors will review all applications from organizations and collaborations and make the final funding decisions.

This programming is supported by GF2 a comprehensive federal-provincial-territorial agreement aimed at encouraging innovation, competitiveness and market development in Canada’s agri-food and agri-products sector.

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June 26, 2013 – Growing Forward 2 Funding Assistance for Capacity Building is now available for producers, processors, organizations and collaborations.  Check out the website at ontario.ca/growingforward2 for program guide and how to apply.

June 26, 2013 to September 5, 2013 – Growing Forward 2 Funding Assistance for Project Implementation is now available for organizations and collaborations.  Check out the website at ontario.ca/growingforward2 for program guide and how to apply.

Environmental Farm Program (EFP) and Growing Your Farm Profits (GYFP)  Workshops available – Register

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Ottawa, June 3, 2013
2013-080

Related Document:


As announced in Economic Action Plan 2013, the Government is inviting comments on proposed measures to eliminate the tax benefits that arise from taxing trusts and certain estates at graduated rates, as part of ongoing efforts to improve the integrity of the tax system.

The estates of most deceased Canadians are finalized and administered in a timely fashion and without inappropriate tax planning. However, some taxpayers are using estates and trusts to obtain unintended tax advantages. Eliminating the tax benefits of graduated rate taxation for trusts and certain estates would ensure increased fairness and neutrality in the federal income tax system. The proposed measures would also address the potential growth in tax planning involving existing rules and the associated impact on the tax base.

Stakeholders are also invited to comment on proposed measures involving a number of related tax rules.

Comments on the proposals outlined in the attached consultation document can be submitted to the Department of Finance at trusts-fiducies@fin.gc.ca or to the address below. The closing date for comments is December 2, 2013.

Trust Graduated Rates
Tax Legislation Division
Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Canada K1A 0G5

For further information, media may contact:

Jack Aubry
Media Relations
Department of Finance
613-996-8080

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