Abbotsford, B.C. (Rural Roots Canada) – Growing costs and rising debt are threatening the long-term competitiveness of British Columbia’s commercial farms, according to a new report from the University of the Fraser Valley (UFV).

The report says B.C.’s roughly 4,100 commercial farms generated a combined operating surplus of $770 million last year, even as Statistics Canada reported a $457-million net loss for the province’s agricultural sector.

The difference, researchers say, highlights how aggregate agricultural statistics can obscure the financial pressures facing commercial farms.

The report, Farming at the Edge: The Financial Health of British Columbia’s Commercial Agricultural Sector, was prepared by UFV agriculture professor Chris Bodnar.

It finds B.C. farms face higher feed, labour, land, rent and financing costs than many competitors elsewhere in Canada. At the same time, farm debt in the province has grown 286% since 2004 — the fastest rate of growth among Canadian provinces.

B.C. is also the only major agricultural province without its own agricultural lending institution, the report says.

“Much of the public discussion about agriculture relies on aggregate statistics that can mask what is happening on commercial farms,” said Bodnar. “What we found is a sector that remains productive and innovative, but one that operates with less financial resilience than other provinces across Canada.”

“The greatest concern is the growing pressure on mid-sized commercial farms that are critical to the future growth of B.C. agriculture,” he adds.

The report identifies about 1,150 commercial farms with annual revenues between $500,000 and $2 million as a particular concern. He describes the group as a “missing middle” that is often well positioned to invest in technology, increase production, and support farm succession, but faces significant competitive challenges.

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The number of farms in that revenue range grew by nearly 40% across Canada over the past decade, while the number in B.C. remained essentially unchanged, according to the report.

Danielle Synotte, executive director of the BC Agriculture Council, said the findings support concerns producers have raised about the province’s higher operating costs.

“This report demonstrates that B.C. agriculture remains a strong economic sector, but continued action is needed to improve competitiveness and create conditions for farms to invest, grow, and succeed,” says Synotte.

Jeremy Dunn, general manager of BC Dairy, said the ability of farms to invest and plan for the future has implications beyond individual businesses.

“When farms can invest, innovate, and plan for the future, the benefits extend beyond the farm gate to food production, economic growth, and communities across British Columbia,” Dunn says.

The report recommends creating a tiered farm classification system that would distinguish between sub-commercial, commercial and large commercial farms.

Researchers say the system would provide a clearer picture of the province’s agricultural sector, help governments target support and ensure policy discussions reflect the realities of commercial farm businesses.

Other recommendations include reforming business risk management programs, expanding agricultural financing options, strengthening labour supports, encouraging technology adoption, improving feed-cost competitiveness and preserving farmland.

The report says improving the financial resilience of commercial farms will be critical to the future growth and competitiveness of B.C. agriculture.