The country’s agriculture sector is on track to increase by 7.5 per cent this year, according to the latest overview on the sector from the Bank of Montreal’s BMO Economics.
That’s despite the ongoing difficulties facing hog and cattle farmers, and the effect of the devastating drought that withered crops in much of the U.S. heartland and parts of Ontario.
“Canadian agricultural producers have seen an impressive rebound in 2012,” said David Rinneard, national manager, agriculture at the Bank of Montreal.
“While challenges remain, continued demand and favourable prices, together with a return to better growing conditions, have been a clear boon to the industry.”
The surge follows a few feeble years, and emerges as other parts of the Canadian economy, such as housing, and consumer and government spending, are stagnating.
A good year in this massive sector – which directly provides one in eight jobs, employs two million people and accounts for about 8.2 per cent of Canada’s total economic output – will enrich the broader economy.
“If farmers have a good year and get some profit, the first they usually do is upgrade their infrastructure. They may put in new storage bins or update their machinery,” said Ron Bonnett, president of the Canadian Federation of Agriculture.
“That in turn has a huge spinoff to the whole economy.”