As sure as day follows night, the release of farm income estimates by Statistics Canada draws expressions of disbelief, criticism and political complaint.
Individual farmers look at the numbers and don’t see their own situation reflected.
Farm leaders see reports about billion dollar farm income increases and accuse the government agency of trying to minimize the problem.
Taxpayers see the big numbers and wonder why they are spending billions to support an industry that appears to be awash in cash.
The 2004 net cash income (receipts minus expenses) as reported by Statistics Canada was $6.3 billion, 34 percent above 2003 and almost back to the five-year average.
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Why would an industry with $6.3 billion be able to attract $4.9 billion in payments from governments?
Agency officials know the questions and criticisms are out there but they insist the numbers and interpretation are the most reliable they can assemble. They are estimates based on industry data constantly flowing into the agency.
“If we didn’t feel confident with the information, we would not publish it,” said Rita Athwal, head of the farm cash receipts unit in the agency’s farm income and prices section.
“It’s the best estimate of what we believe happened,” added her boss, section chief Paul Murray.
Data on sales, prices and costs are gathered constantly from various sources such as marketing boards, the Canadian Grain Commission, companies and occasional farm surveys.
The numbers, however, are not a compilation of actual expenses and revenues on each farm, said Athwal. And farmers should not look at the aggregate numbers to see their farm reflected.
“This is not meant to be applied on a farm-by-farm basis,” she said. “This is meant to show trends in the industry and its primary purpose is to be the agricultural input into national accounts” where annual gross domestic product estimates on the national economy are compiled.
The numbers are revised when more accurate farmer tax data are available.
One of the agency’s most controversial practices is to highlight net cash income, which is revenues minus receipts.
Farmers and many economists suggest a more accurate view of farmer financial health is realized net income, which deducts depreciation.
Murray said Statistics Canada considers net cash income the best gauge because it indicates how much cash farmers have to make choices, whether it goes to debt repayment, investment or equipment replacement.
