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The risk balancing literature suggests that business risk management (BRM) programs may, through risk balancing (offsetting adjustments between business risk and financial risk), lead farmers to take on more financial risk than they would take otherwise, which, in turn, increases the risk of equity loss. Business risk management continues to be the central objective of Canadian agricultural policy, and this was re-enforced with the recent introduction of the Growing Forward II policy framework. However, it is not known whether Canadian BRM programs designed to offset business risk lead to increased financial risk and possibly higher levels of overall risk for individual farm operations. This paper aims to empirically examine the impact of Canadian BRM programs on the financial riskiness of farms using a longitudinal farm data set from Ontario. Results show that: 1) the lag of payment of Canadian Agricultural Income Stabilization/AgriStability diminishes the effectiveness of BRM programs in reducing business risk; 2) a relatively small share of farms exhibit risk balancing behaviour, and 3) BRM payments have no impact on the likelihood of risk balancing. Taken together, these findings suggest that the impact of BRM programs on the financial riskiness of farms is limited.

From the protests in the streets of Genoa, Quebec and Seattle to the U.S. Senate, one doesn’t have to look far to find opposition to globalization and concentration.“… [D]o something about antitrust, the concentration that is clogging the free market …”1was one plea in the Senate debate of the Wellstone Amendment 2752. The proposal to place a moratorium on large agribusiness mergers and to establish a commission to review agricultural mergers, concentration, and market power was defeated 71 to 21 but provides an indicator of the concern felt in some quarters. Similar legislative proposals have been made in the European Union and again in the United States. Globalization and concentration have changed the agri-food sector. To experience global competitors, a firm does not have to enter new markets; the competitors will come to the firm. Adapting to the changing global landscape requires managers and policymakers to view the world differently, understand the factors behind the changes and plan how best to alter corporate strategy or government policy to meet the new challenges.

Innovative new products offer agri-food producers and processors an opportunity to differentiate their output from the commodities prevalent in the sector. Unfortunately, many new products do not live up to initial expectations and are eventually abandoned. However, even with products that are doomed to fail, there is occasionally a period of time after their introduction when strong, but fallacious, indicators of success appear. Sometimes the initial appearance of success is so strong that new entrants rush in, increasing demand and prices for production capacity, thereby strengthening the illusion of industry success. Eventually, supply catches up to the unsupported demand and the bubble bursts. The fall is often dramatic and painful. This paper provides a retrospective examination of the economic factors surrounding one example of such a situation, the Ontario emu bubble between 1993 and 1996.

A summary report of the presentations and the discussion at the national workshop on innovation in the Canadian economy and the Canadian agriculture and food sector held on September 26-27, 2002 in Guelph, Ontario. This report is the second product of a joint collaborative agreement between the Research and Analysis Directorate of Agriculture and Agri-Food Canada (AAFC) and the Department of Agricultural Economics and Business of the University of Guelph. The first product of the collaborative agreement was the organizing and holding of the workshop. This report provides a summary and a synthesis of the presentations and the discussions at the workshop.

Innovative new products offer agri-food producers and processors an opportunity to differentiate their output from the commodities prevalent in the sector. Unfortunately, many new products do not live up to initial expectations and are eventually abandoned. However, even with products that are doomed to fail, there is occasionally a period of time after their introduction when strong, but fallacious, indicators of success appear. Sometimes the initial appearance of success is so strong that new entrants rush in, increasing demand and prices for production capacity, thereby strengthening the illusion of industry success. Eventually, supply catches up to the unsupported demand and the bubble bursts. The fall is often dramatic and painful. This paper provides a retrospective examination of the economic factors surrounding one example of such a situation, the Ontario emu bubble between 1993 and 1996.