With projections of record farm income in 2012 and strong returns this year, agriculture minister Gerry Ritz says it is a great time to be in agriculture.
An Agriculture Canada farm income report published Feb. 27 projects net cash income in 2012 after expenses at a record $13.1 billion, a 14 percent increase over 2011.
In 2013, the department projects a slight drop to $12.86 billion but still 42 percent above the five-year average.
The optimistic forecast is the result of soaring commodity prices and input costs that are projected to rise at a far slower pace.
The department projects positive farm bottom lines over the next decade led by growing world demand for food.
The need for government support programs will decline, in part because of better market conditions and in part because new farm program rules set to take effect April 1 lower farm payment eligibility.
“Looking ahead, the outlook is bright with a strong farm economy, growing global demand and world-class producers,” Ritz told the House of Commons agriculture committee Feb. 28.
He said the average farm income in 2012 is expected to exceed $74,000, a 17 percent increase over 2011. Average farm net worth asset value is projected to have increased eight percent in 2012 to a record $1.8 million.
Ritz said livestock sector prospects will be for “modest” growth in years ahead.
And last year, the value of agriculture and food exports increased 7.4 percent to $47.7 billion, according to Agriculture Canada projections.
“The bottom line is that it’s a great time to be involved in Canadian agriculture,” Ritz told MPs.
He defended the new set of Growing Forward programs that take effect April 1, decreasing farm income support through AgriStability and AgriInvest but investing more in innovation, competitiveness and market development.
“The message I’m hearing loud and clear is we need to move beyond the status quo,” said Ritz. “We need to look ahead, not backward, toward positive proactive initiatives that will move the industry forward.”
Government spending estimates tabled in Parliament last week suggest government spending on agriculture in the next fiscal year will fall by $600 million including reductions in food inspection, but Ritz said more money will be added as needed during the year.