The Microdynamics of Farm Structural Change in North America: The Canadian Experience and Canada‐U.S.A. Comparisons

Abstract

Large gross flows of entry into and exit from agriculture combined with paths of expansion and contraction by continuing farmers produce the modest but persistent net changes in the economic concentration of agriculture observed in Canada and the adjacent states of the northern United States. Relatively minor proportional changes in these gross flows can produce major proportional changes in net rates of structural change which are observed from one census to the next. Between 1976 and 1981, for example, there was a small net decline (5.9%) in the number of Canadian farm operators from 337,782 to 317,758 which resulted from 29.7% of the 1976 farm operators (100,325) exiting from agriculture and 25.3% of the 1981 farm operators (80,301) who entered agriculture during this five-year interval. Imagine a set of circumstances that would moderately increase the exit rate and modestly decrease the entry rate; the result would be a rapid net decline in farm numbers akin to the rural exodus of the 1950s. Entry, exit, and farm operator mobility flows shape the process of economic concentration and the accompanying reorganization of farm enterprises, such as an increased use of hired, nonfamily labor. A microdata base which can trace these gross flows is a prerequisite for understanding structural change in modem agriculture. Statistics Canada has developed what is perhaps the most advanced agricultural microdata base currently available to researchers. Files from the agricultural censuses for 1966, 1971, 1976, and 1981 have been linked in order to follow paths of contraction, stability, or expansion of individual farmers over time. Individual files from the general census of population for 1971 and 1981 have also been linked to files in the census of agriculture. Factors such as education and the total input of labor and income by farm operator families can then be linked to farm variables in order to deepen our understanding of the changing structure of modern agriculture.