Manitoba Rural Adaptation Council

There is opportunity for growth in large industries, but the major long-term economic impact for rural communities will be in small business development in the agri-food and agri-product sector.  Rural communities must be encouraged to diversify into new products and services, thus generating wealth by building on established resource-based industries.  This includes exploring/expanding on currently popular new areas as well as envisioning innovative areas/ideas for development.  “Although many factors are related to linkages within rural communities, communications, the labour force and value-added processing are three of the most significant.  These affect day-to-day life and drive the economic functions in an area” (Trend Analysis Interim Report-Scan – Rounds & Associates).

Some impediments to growth in these sectors include the growing concern about the skills gap between labour supply and demand and subsequently the impediment of growth to potential, lack of innovation, and opportunity for incubation of new ideas and lack of capital and financing.

In order to foster the sustainability and expansion of a youthful, engaged and vibrant rural community, there needs to be a social and economic environment that encourages and fosters the growth, attraction and retention of an engaged, skilled and satisfied work force.  Consequently, the major role of the four stakeholders involved in the solution (business, labour, governments and rural communities) is to jointly overcome roadblocks to enable this to happen.

OPPORTUNITIES:

New business start-ups and small business ventures have accounted for some 80 per cent of net job creation in Manitoba (and Canada) over the last decade.  Rural communities can generate wealth by building on established resource-based industries such as the strong agricultural base in Manitoba.  In addition, rural communities must be encouraged to diversify into new products and services.  Rural Manitobans are faced with several challenges as they attempt to strengthen their local economies, such as low or volatile prices for agricultural commodities, an aging population, out-migration, decline in the number of farms, distance from major markets, and loss of infrastructure and service support.  To meet these challenges, rural communities must take a more innovative, community-based approach to economic development.  Many Manitoba communities have demonstrated their proactive approach by establishing economic development committees, which provide leadership and vision for their economic future. 

The Manitoba economy has traditionally depended on the export of resource-based commodities.  These sectors offer limited potential for future growth, but provide an important economic foundation that must be maintained through continued development efforts.  They will be challenged to maintain their competitiveness through innovation, incorporation of new technologies and value-added processing activities.  Despite severe disruption in world markets over the past decade, agriculture remains a major economic force in Manitoba.  The province is also the administrative hub of the Canadian agricultural industry.  Winnipeg is the national headquarters for key industry institutions and is home to Canada’s only commodity exchange market.

While grains and oilseeds are the province’s most important crops and exports, Manitoba has significant production in dairy, hogs and pork, cattle and beef, poultry and eggs, vegetables and specialty crops.  To keep pace with changing world trends, and changes in international and domestic regulations, the industry must place greater emphasis on the development of new products and markets.  Value-added industries must be further identified and encouraged as a way of deriving maximum economic benefit from Manitoba’s agricultural production.  One of the key sectors of emerging opportunities in Manitoba is agri-food and agri-product manufacturing and processing and part of the key to developing this sector is an accessible, skilled and adaptable workforce. 

IMPEDIMENTS:

Development of a stronger rural economy is essential to sustained economic growth in Manitoba.  Centralized economic development strategies of the past have failed to fully develop rural labour and resources, thereby preventing the province from achieving its full economic growth potential.

The shift from a resource-based to an information-based economy, together with the rapid introduction and expanding use of new technologies in the workplace, is dramatically altering the composition of skills in demand.  As the percentage of youth in the population declines, the average age of workers is increasing.  This demographic shift will have a significant impact on the supply of labour.  Traditionally, the 15 to34 year old age group has been considered the prime cohort for skill acquisition and mobility.  In 1978, this group accounted for 53 per cent of the labour force, but by the year 2008 it declined to approximately 40 per cent.

The statistics for all of Canada are dramatic:  the size of the 35 to 44 age group increased by 40 per cent between 1986 and 2000 and the 45 to 54 age group expanded by 75 per cent.  Statistics Canada reported that, in Manitoba, the number of older workers (ages 45 to 64) were approximately 250,000 in the year 2000 compared with 153,000 workers between the ages of 15 to 24 for that same timeline.  It was predicted that, in the agricultural sector, there would be a dramatic turnover in management due to retirements within the next 15 years.  That prediction has become a double edged sword – there are those that wish to retire, but cannot as there is not the financial availability to allow younger owners to purchase the land, and there are not enough young people willing to embark on the risky career of “feeding the world.”  Unfortunately a retirement package for a lot of these older producers becomes “exit by demise.”

An emerging issue for rural returnees is traditional mindset of government assistance and succession planning (at all levels).  Governments seem to have identified an acceptable model for transition that is supported by bureaucracy but, in truth it hasn’t worked for the last 40 years and yet we still see the same principles applied with the expectation of different results!  The entrepreneurial rural person does not want to be looking for regular support for a maintained level of existence.  They wish to be provided the tools and overall support and faith that they can have ownership in creating their own destiny rather than having someone hovering over them (the “helicopter generation”) to protect them from making mistakes.

ROLE:

It is becoming increasingly apparent that there is a major role for rural Canadian stakeholders to be involved in developing and supporting a plan, and subsequent infrastructure, so that Canada can become recognized as leading proactively, rather than reactively, in the new value-added rural economy.

Canada has a tremendous opportunity to move past commodity agriculture to providing high value goods into a large, mature and sophisticated market.  With the emergence of health conscious products, environmentally responsible systems, and the emerging bio based process, it will be critical to have trade enable the flow of these products, capturing value and enhancing trade.  An important role needs to be fulfilled to ensure future value processed goods are supported by this agreement, rather than the traditional “market access of bulk commodity goods” which is the current default mode for the agricultural sector.

The current economic meltdown, along with the emergence of China and India as suppliers of goods and services, will result in a new, and possibly chaotic, reality for Canada’s labour force.  There is serious talk of a return to a less consumer driven society that is less prepared to sacrifice family life and relationships for the relentless pursuit of “traditional success.”  There is an opportunity for rural Canada to showcase itself as the answer to quality of life issues with which young professionals and families have been struggling.  New businesses that develop an understanding of the needs of a young workforce and what their wants are in order to live their lifestyle, will be able to capture a more stable workforce.  The development of newer processes and the bio processing industry, along with establishment of facilities closer to the source of production, will be occurring, which will attract a workforce looking at a balance in their quality of life issues. Agriculture and community (rural and urban) development have become a blended entity.  Rather than trying to maintain separation, it is apparent that these previously distinct entities should be addressed collaboratively.  There is a continuum of rural regeneration that has not been captured to this point.  Amenities taken for granted (and assumed as always accessible) have been an asset for growth and expansion in urban areas and a deterrent for rural areas due to lack of affordable availability and accessibility.  Electrification of the rural communities was seen as a means of employment for returning veterans after WWII but it had the positive result of bringing the rural areas up to a par with city living.  Gasification was the most recent attempt at levelling the playing field for both rural families as well as potential industry development.  Connectivity (high speed internet access) is at the forefront now and is sharing the limelight with alternative energy.  Waterfication (useable water supply for consumption and industry) will be the catalyst that will help spur industry growth and employment opportunities and subsequently rural repopulation in the future.  There is a need for rural communities to become part of a catalytic process in the continuum of rural revitalization!

CALL TO ACTION:

The future can be directed at a variety of emerging gaps:

1. Encouraging diversification and value-added activities in rural communities;
2. Development of leadership skills and human resources;
3. Preservation and enhancement of the environment;
4. Identification and evaluation of areas of rural opportunities;
5. Exploring emerging sectoral opportunities in areas such as tourism, telecommunications, environmental industries and value-added processing of resources;
6. Financial support to encourage, explore and nurture risky ventures with a risk mitigation approach versus a risk reduction or aversion approach;
7. Accessible training, education and mentorship at the farm gate, and
8. Effective use of organizations and agencies (such as MRAC) to deliver programs that encourage collaboration, partnerships and outside the box thinking. 

January 2010
Developed by the MRAC Human Resource/Infrastructure Task Force Committee in response to a press release issued by Minister Jean-Pierre Blackburn encouraging young farmer input to identify issues facing today’s young and returning primary producers.