The federal government last week produced farm income statistics that project better times just ahead.
In some cases, they suggest farm economic trends are favorable, despite tough times in the grain and hog sectors.
“Longer-term forecasts are for increased demand, higher prices and improved farm income and beyond,” says a farm financial situation report published last week by Agriculture Canada.
It acknowledged that overall net cash income on the farm will fall eight percent next year from a five-year average, and drop even more in grain and hog sectors.
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But there was a rosier view.
“In the longer term, income projections show strong reliance on market performance, with lower but stable government support,” said the report prepared by Agriculture Canada economists.
The report led to some media reports questioning whether the farm income crisis that led to last week’s $900 million federal farm support program is real.
The evidence that the farm economy is in good shape came from a number of statistics in the report:
- In the decade to 1995, farm family incomes (including off-farm income) increased almost 12 percent, “substantially more than the increase for urban (four percent) and rural (three percent) non-farm families.
“Farm family incomes continue to increase, and at a more rapid rate than either urban or rural non-farm family incomes. In 1998, farm family income is estimated at $56,298.”
- Between 1993 and 1997, the average net worth of large farms in Canada grew 15 percent to almost $1 million.
- Average net farm worth increased 17 percent in those years, to more than $646,000.
- Farm bankruptcies have been falling since 1991.
- Despite sharp decreases in Saskatchewan, Manitoba and Prince Edward Island, “income in 1998 is expected to be above the previous five-year average in all other provinces.”
- On a national level, farm income reached near-record levels in 1997. In 1998, farm income is expected to be four percent below the previous five-year average.
The farm statistical report also notes the $2.5 billion saved by farmers, with government contributions, in their Net Income Stabilization Accounts.
According to the government figures, the most profitable farm enterprise in recent years has been Ontario’s tobacco industry, “with a rate of return of almost 11 percent.” It was closely followed by the fruit and vegetable industry, at slightly less than 10 percent return.
According to income tax records between 1992-1995, the cattle industry had the lowest return on investment. Grains and oilseeds, just over seven percent, was in the middle, as were supply-managed sectors of poultry, dairy and egg producers.
