NEW STUDY MAKES THE IMPORTANCE OF THE GRAIN AND OILSEED INDUSTRY CLEAR
AMONG FARMERS, IT is common knowledge that agriculture plays an integral role in Ontario’s economy. A recent study, commissioned by the Ontario Grains & Oilseeds Safety Net Committee, provides empirical evidence that indeed, Ontario’s grain and oilseed industry is a valuable contributor to our economy.
The study, carried out by Planscape, a private consultation company, proves through statistical data that the Ontario grain and oilseed industry has an annual economic impact in Ontario of $5.9 billion. This data reveals that every dollar of annual output stimulates $2.74 of output from all linked industries in the provincial economy. By comparison, for every dollar of annual output in retail trade, linked industries receive $2.57.
These numbers were found through a thorough analysis of complex statistics. To find the industry’s total economic impact on the province, farm cash receipts generated by Statistics Canada were used as the main data source.
However, farm cash receipts don’t reveal the true story. Utilizing monetary activity measures like farm cash receipts overlooks the use of grains and oilseeds as an on-farm input; farm cash receipts don’t capture product consumed on farms in their statistics. Failing to consider the use of grains and oilseeds in on-farm activities like livestock production can significantly undervalue the industry. Therefore, the $5.9 billion estimate of the economic impact of our industry is extremely conservative.
With this in mind, the study also looks at another data set to measure the impact of the grain and oilseed industry: value of production data generated by OMAFRA. Using this data, the study demonstrates that there is $3.1 billion of annual grain and oilseed production in the province which generates an economic impact of $9.9 billion on the Ontario economy.
DIGGING THROUGH THE DATA
To come up with the $5.9 billion economic impact numbers, the study looks at four major impacts the grain and oilseed industry has on the provincial economy.
The first number to look at is the direct impact of the industry. Using the conservative data of farm cash receipts, our industry’s spending on direct input requirements provides $1.3 billion in stimulus to the economy.
Indirect impacts, although slightly more difficult to quantify, are equally important. Indirect impacts are defined as any additional rounds of spending generated as input providers purchase inputs to produce their outputs. An example of this would be a seed company purchasing electricity in order to produce bags of seed.
Further rounds of spending that stem from income earned by workers in the grain and oilseed industry is measured as induced impacts. For our industry, using the conservative farm cash receipt numbers, our induced impact is $1.8 billion.
The final portion that makes up the grand number of $5.9 billion is the industry’s labour income, representing money coming into households. Labour income from the grain and oilseed industry adds $1.4 billion to the provincial economy every year.
THE BIG PICTURE
The Ontario grain &?oilseed industry uses the data from this study for our government and industry relations. This study backs our stance as Ontario’s largest agricultural industry representing 28,000 farmers, five million acres of farmland, over $2.5 billion in farmgate receipts resulting in a $9.9 billion economic impact and 40,000 jobs in the province. We are second only to the automotive sector and growing every day. •