For this and a number of other reasons agricultural settlement was, and for some people today still is, seen as the key to economic development. Closely related is the notion that agriculture is in some sense the "basic" industry in all countries.
Until recently it has been taken for granted in "countries of recent settlement" such as Canada that an expanding agricultural sector was a fundamental requirement for development. The Canadian experience with agriculture has, however, been peculiar for a number of reasons. One is that through the early period of Canadian history, when the main force driving economic development was the fur trade, the interests of that trade were quite opposed to those of agricultural settlers. The expansion of farming into the forests and plains of the interior destroyed the fur resource and the economic and social institutions based on it. There was also a conflict between the timber trade and agriculture in that clearing the forests for farming also destroyed the resource base of that activity, although there was also a complementary element in the relationship as well, for in some areas early farming was supported by the opportunities for employment and cash income made available by nearby operations in the woods. In any case, by the late 18 or early 19th century, the opening up of new areas of the country to commercial farming was coming to be equated with progress. Agriculture was consequently seen to be worthy of public support, a view farmers were more than willing to help promote.
The idea that agriculture is somehow "the basic industry" has had an interesting history. The French "Physiocrats", led by the court physician of Louis XV, François Quesnay (1694–1774), developed an elaborate theory of value that singled out agriculture as the basis of all wealth. Like many educated people of the time, Quesnay was deeply committed to the idea that the world was governed by a system of "natural law" and that all wealth and life itself derived from some devine source. He was also influenced in his thinking by the advances which had been made in understanding these natural processes, for example, William Harvey’s discovery of the circulation of blood in the human body. Against this background Quesnay developed the axiom that agriculture was the only activity which could yield a surplus of value in excess of the effort put into it. This was because agriculture tapped into the "life-giving force of nature". But, by the time Quesnay was writing, the modern market economy, with its increasingly elaborate system of trade, commerce and industrial activity, was already becoming well established. Indeed many of his contemporaries were already converted to the belief that trade and industry had become the chief sources of wealth creation, a view that was developed in the doctrine of mercantilism. Quesnay’s answer to this was his famous Tableau Economiqe which set out how the surplus created in agriculture circulated throughout the economy (the life blood of the system, as it were). In his view, trade and industry, which had no connection with the life-force of nature, could add nothing to the wealth of a nation, they were essentially "sterile." It followed that everything possible should be done to encourage agriculture. Scientific methods should be applied to promote agricultural production and the prices of agricultural products should be kept high to encourage farmers in their efforts. Quesnay and his followers believed they had discovered a fundamental law of economics, just as powerful and natural as the law of gravity or the other laws which were being discovered to explain the workings of the natural world. (In England, Isaac Newton had published his Mathematical Principles of Natural Philosophy in 1687, seven years before Quesnay was born, demonstrating how the universe was governed by certain basic laws of motion in which all things were kept in their proper place through the forces of gravity and conservation of energy.) Once the basic law of economics was understood, they believed, it would be possible to use it to better manage the affairs of the nation. For example, with respect to public finance, the Physiocrats could show that it was inefficient to tax anything other than land. Imposing taxes on industrialists or traders meant only that they would pass the tax back to farmers through higher prices for manufactured and traded goods.
In the United States, the principles of the Physiocrats were enthusiastically embrac ed by the followers of Thomas Jefferson, who became President of the United States in 1800. For them, an ideal democracy would be one in which most people would be involved in agricultural production. Small land-owning farmers would provide the backbone of society. Jefferson equated farming with independence and self-reliance whereas other occupations bred dependence on others, which he believed promoted subservience and venality. It was only with reluctance that Jefferson and his staunch Republican supporters, many of whom were members of the southern slave-owning aristocracy, could bring themselves to compromise with the needs of merchant and manufacturing interests, compromise made necessary by the struggle of the new nation to withstand the continuing commercial and military pressure from Britain in the early years of the 19th century.
Agricultural settlement in North America followed the natural river and other communications systems inland from the Atlantic coast. Even in the US, where considerable manufacturing development was beginning in the early years of the 19th Century, over 90 per cent of the population lived on farms or in small towns. Through the 1820s and 1830s American agricultural production was expanding on two main fronts. One, in the south, involved the growth of cotton production which in turn was the result of increased planting to meet the growing demand for cotton in Britain and in other export markets and a great increase in productivity due to the development of the cotton gin, Eli Whitney’s revolutionary invention which was introduced in 1793. A second source of new agricultural output was the movement of farmers into the fertile Mississippi Valley and the American mid-west. Corn and wheat were the main crops and their production was greatly encouraged by the reductions in transport costs that came with the construction of canals such as the Erie which linked upper New York State to eastern markets in the 1830s. Also important were the productivity improvements made possible by the mechanization of many farming operations. Tilling the heavy soils of the region was made much easier with the introduction of the steel plough, developed by John Deere and produced in large quantities at the Deere factory in Illinois. Until the 1830s grain was laboriously harvested using hand tools. The mechanical reaper was developed in the 1830s and was soon followed by other horse-drawn implements such as seed drills, cultivators, mowers, rakes, and threshing machines .
Although "pioneer" farming in what is now eastern Canada is often thought of as involving self-sufficient farmers eking out their own living, producing a variety of foodstuffs and supplies for their own or their neighbours’ consumption, this was seldom the case. While some such "subsistence farming" could be found in certain areas, in fact much of even the earliest agriculture in what was to become Canada was quite different. As the frontier of settlement moved inland, most of the farms were established as commercial operations—family-owned and operated, it is true, but relatively specialized in their output, the bulk of which was produced for sale in often distant markets.
During the French Régime in the St. Lawrence region agriculture spread gradually outward from the earliest settlements east and west along both sides of the river and eventually into the valleys of its tributaries. Much of this land was of mediocre quality and climatic conditions were generally worse than early French settlers had experienced in France. Although summer temperatures and rainfall were not much different than in the north of France, winters were longer and much more severe. Unlike the early settlers of New England, most of the immigrants to New France were relatively unskilled and poor. Another difference was the system of land-holding. The "seigneurial" system imposed in New France established property rights of a kind unusual in North America. Land was granted by the government to owners who then "sub-let" parcels, typically arranged in narrow lots extending back from river frontages, to tenant-operators. One consequence of this was that in New France, as in Latin America, a small part of the population gained control of much of the agricultural land. Another similarity with Latin America was that the Roman Catholic Church in New France was also a major beneficiary of colonial land policy, receiving over a quarter of the available land to be used for its own purposes.
The rents paid by tenants to landlords varied according to the economic value of the land. How burdensome these payments were is debated in the literature, but the consensus appears to be that they were not large as a percentage of average farm incomes. Whether or not this system of land tenure had a negative effect on agricultural output or on the colony’s economic development in general is also a matter of ongoing debate. As noted earlier, much of the traditional literature on New France presents a bleak view of the colony’ agricultural development, emphasizing the obstacles posed by climate, the quality of the soils available, the high costs of clearing and improving land, the scarcity of experienced agricultural labour, and the costs of shipping foodstuffs to European and French colonial markets in the Caribbean. Yet, again, more recent empirical suggest that the economy of New France was in fact vital and expanding, with agricultural output playing a major role in its growth.
After the British Conquest the existing seigneurial arrangements were left in place, but the Constitutional Act of 1791 (which divided Quebec into Lower and Upper Canada) provided that all new land concessions in Quebec were to be made in the British freehold system. The influx of United Empire Loyalists in the years following the American Revolution was largely accommodated by extensive land grants in the fertile Eastern Townships lying south of the St. Lawrence. By the early 1800’s there were more than 20,000 settlers in this area, most of them Anglophones. North of the old seigneuries along the St. Lawrence, settlement followed the timber industry. Most of the new settlers were immigrants from Ireland, Scotland, and the United States, although later in the century French Canadians began moving into these regions, including the Ottawa Valley. Because of the poor soils and harsh climate of the northern regions bordering the Canadian Shield, few of these new farms prospered and most of the population that remained there became locked into a form of subsistence agriculture. Times were particularly hard during the 1830’s when even the well-established farmers in the longer-settled areas experienced difficulties. Low prices and falling incomes caused many farmers in Lower Canada to support the Quebec nationalist movement and the anti-colonial rebellion of 1837 in the hope of improving their situation.
Further west, in Upper Canada, the Loyalists and other agricultural settlers made more rapid progress in developing commercial farming. After 1830 the expansion of agriculture in Upper Canada outstripped that of Lower Canada as farming spread through the fertile agricultural lands of what is now southern Ontario. At first a variety of crops including peas, barley, rye and buckwheat were produced for sale in local markets, but wheat quickly emerged as a major staple export commodity. Although there were some wheat shipments to the US market, most of the Canadian grain exports in the first half of the 19th century went to Britain, where they were given favourable treatment under the British "Corn Laws". Production techniques were basically similar in Upper and Lower Canada, relying heavily on extensive cultivation and the use of rather simple crop rotation practices. Although some roads were built in the early 1800’s, most shipment of grains and other bulky commodities relied on the waterways.
As in Lower Canada, falling grain prices in the British market in the 1820’s and 1830’s, combined with crop failures, created hardships for farmers in Upper Canada. Despite differences in local circumstances, the political repercussions were much the same. In Lower Canada there were demands for reform of the land-tenure system, culminating in the abolition of the seigneurial system in 1854. In Upper Canada much of the agrarian discontent focused on the activities of companies engaged in land speculation, in particular the Canada Company, which held large parcels of land in the southwestern region of the province. There was also widespread resentment of the political influence of the Family Compact, a small local oligarchy, which dominated the Assembly and supported measures which appeared to favour merchants and commercial interests at the expense of farmers. One particularly sensitive issue was the question of allowing US grain into Ontario—a policy which the merchants wanted and the farmers opposed. The Union of the Canadas in 1842 was partly a response to the deteriorating economic conditions in the two provinces, but it also promised a way out of the political impasse over the funding of improvements to the St. Lawrence waterway.
Instead of getting better, however, the situation of Canadian farmers in the later 1840’s became even worse. In 1846 the British government began dismantling the old system of imperial preferences upon which the Canadian grain trade had been founded. As the influence of British manufacturers increased, there was growing political pressure in Britain to eliminate restrictions which were thought to keep food prices (and consequently the wages of industrial workers) high. The Corn Laws were repealed in 1846, import duties on wheat were reduced to nominal levels in 1849 and eliminated entirely in 1869. Faced with the loss of preferential treatment in the British market, many farmers in the Canadas supported the Annexation Movement of 1848-9 (which proposed union with the US), and the Reciprocity Agreement in the 1850’s.
In addition to these important changes on the demand side, there were also significant changes in the methods of production in Canadian farming. Parallel with the experience in the US, the rate of technical change in farming accelerated sharply. By the middle of the century, horse-powered mechanical reapers and threshers were coming into common use, especially on the larger farms of Canada West. The result was greatly increased output per acre and a marked reduction in the demand for farm labour. Many farmers also began making substantial investments to improve agricultural land itself. Tiling fields to improve drainage and lengthen the cropping season and removing boulders and hedgerows to enlarge fields increased the efficiency of farming operations. The amount of information available to farmers also increased. Agricultural societies and educational programs became important features of farm life in the 1840’s and 1850’s, enabling farmers to learn about new crops and practices.
Such innovations were most readily taken up by the more prosperous commercial farmers of Canada West. In Canada East, farmers were slower to adapt to the new circumstances of the mid-19th century. During the 1840’s the rural population there grew rapidly, due mainly to a rising rate of natural increase, but average farm income appears to have remained more or less stationary. As transportation costs fell, farmers in Quebec faced increasing competition from producers in Ontario and the American mid-west, especially in the production of wheat, which lent itself to the more efficient large-scale production methods then being introduced. Few Quebec farmers, especially in the older seigneurial region, could afford to acquire the new machines or the horses to operate them. Some were able to survive by switching to other crops such as hay, buckwheat, and oats, or by giving up grain farming in favour of livestock raising and dairying. Others, who found themselves unable to adapt, left farming and moved to the cities. Large numbers of French-speaking farmers emigrated to find work in the factory towns of Maine, New Hampshire and Vermont.
After 1850 the same transportation improvements which made it difficult for Quebec farmers to compete in wheat production facilitated the development of markets for dairy and meat products. The growth of Montreal and other cities created markets for butter, cheese, and meat. Under Reciprocity Quebec dairy products were also able to enter US markets. When reciprocity ended (in 1866) the Canadian government imposed import duties on meat, butter and cheese to protect domestic producers from US imports.
Although many farmers in Canada West were better able by reason of soil qualities, an easier climate, and more adequate financing to adopt the new production methods required to remain competitive in wheat production, they too began to shift to other crops and to dairying in the second half of the 19th century. In the 1850’s exports of dairy products from Canada West were insignificant, but by the time of Confederation they exceeded wheat exports in value. The causes of this change have been studied, but are not yet well understood. There is some evidence of declining soil fertility, in some cases due to poor agricultural practices which sacrificed soil maintenance for short-term commercial gains. It has also been noted that while income from wheat was higher than from other crops, it was more uncertain, subject to sharp fluctuations in prices and yields and thereby possibly less appealing than the alternatives to risk-averse farmers. Improvements were also taking place in local markets for dairy and meat products due to the growth of major urban centres, such as Toronto and Hamilton. There were also growing opportunities to begin expanding into foreign markets as well.
Important as these new agricultural activities were to the continued growth of central Canada, it was becoming obvious by the 1860’s that the frontier of agricultural settlement was for all practical purposes closed in this part of North America. Although some visionaries suggested that northward expansion was possible — a hope which led to several disastrous attempts to establish agricultural settlers in the northern parts of central Canada — most observers knew that if there was to be a continuation of extensive agricultural settlement it would have to be much further west, beyond the thousand miles of inhospitable wilderness which separated south-western Ontario and what is now eastern Manitoba.
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