Agricultural economy’ ripples’ through community

“Agriculture plays a critical role in Ontario’s economy. In addition to providing food for Ontarians, it also significantly contributes to employment rates and the prosperity of other related sectors,” states a 2024 economic impact study prepared by the Ontario Federation of Agriculture (OFA).

It found that for every dollar generated in direct farming activities, $1.67 in economic business revenue is created through direct and indirect effects. This economic output increases to $1.90 when considering the induced effects, which include the additional spending in the local economy by workers supported by the farming industry.

This ripple effect highlights how farming supports a wide array of secondary activities, from manufacturing and services to retail and beyond.

The report, drawing on the most recent Statistics Canada data, shows that Ontario farming alone generated $18.17 billion in direct revenue in 2020, generating $15.3 billion in GDP, $1.27 billion in tax revenue, 297,247 jobs, and $ 7.8 billion in labour income.

These wages contribute to local economies.

“The ripple effect of farm production significantly boosts economic activities across various sectors,” said OFA’s senior farm policy analyst Ben Lefort in a recent presentation of the study’s findings.

Once farm products leave the farm, they undergo further processing before they reach the consumer, which adds economic value.

Most products are used by processors and manufacturers in the food and beverage manufacturing sector. When the revenue of the food manufacturing sector is included, along with their upstream expenditures (including farm revenue), there is a significantincrease in economic activity.

In 2020, food manufacturing revenue was $18.17 billion, with a GDP impact of nearly $36 billion, and 584,577 jobs. The labour income from the food manufacturing sector totalled close to $20 billion and the sector generated $2.8 billion in government tax revenue.

Farms generate essential raw materials that feed into the manufacturing, distribution, and retail segments of the food supply chain. The economic activities initiated by farming have far-reaching effects, influencing multiple sectors and contributing to the stability and prosperity of local communities.

Farm revenue reflects the immediate economic output generated by farming operations.

The report concludes, “The economic contributions of Ontario’s farming sector are significant and far-reaching, extending beyond the farm gates to support various industries and communities across the province. As demonstrated in this report, the primary agriculture sector alone generates substantial revenues, contributing billions to the GDP, supporting nearly 300,000 jobs, andgenerating significant tax revenues for all levels of government. The interconnected nature of the farming sector with other industries such as manufacturing, wholesale trade, and transportation underscores its vital role in driving economic activity and fostering economic stability.”

Farm sector revenue by industry:

Total: $18.17 billion

• Animal production (except aquaculture): $7,140,005,000
• Crop production (except cannabis, greenhouse, nursery and floriculture production): $7,016,399,000
• Cannabis production: (licensed) $1,382,631,000
• Aquaculture: $32,139,000
• Greenhouse, nursery and floriculture production (except cannabis): $2,599,613

In 2020, farmer revenue in Simcoe County was $581,909,000. The top three commodities by revenue in Simcoe County were oilseed and grain, beef cattle, and other crops:

• $581,909,000 in farm revenue, expands to $ 971,748,000 in total business revenue in the open model, and $1,102,889,000 in the closed model, illustrating not just the volume of farm production, but also the value added by the sector to the provincial economy.

In 2020, farmer revenue for Dufferin County was $163,184,000. The top three commodities by revenue in Dufferin County were beef cattle, oilseed and grain, and other animal production:

• $163,184,000 in farm revenue, $272,507,000 in total business revenue in the open model, and $309,282,000 in the closed model.