Statistics Canada reported May 26 that farm costs are soaring at near-record rates, driving net farm income down sharply.
Even though total cash receipts rose five percent in 1996, net cash income, after expenses, fell eight percent to $5.4 billion and total net income after depreciation fell 14 percent to $2.65 billion.
And the news from early 1997 was even worse.
The federal agency reported that during the first three months of the year, farm cash receipts fell slightly because of declines in grain income.
The news will put pressure on the next federal agriculture minister to make a priority of repairing the tatters in the farm safety net system, farm leaders predicted.
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Farm lobbyists will be using the numbers to argue that the next government should move quickly to try to contain and reduce new input costs imposed by Ottawa, whether in the form of higher user fees or increased costs due to declining subsidies.
“I guess this shouldn’t surprise anyone,” Canadian Federation of Agriculture president Jack Wilkinson said May 26. “We have been saying for some time that despite all the glowing numbers from the economists about higher incomes, farmer’s bottom line has been deteriorating because of higher costs.”
He said the CFA will be making that point soon after the next agriculture minister is sworn in after the June 2 election.
“I can’t see how this won’t be a big issue facing the new minister,” he said. “The safety net system we have now is just not adequate. It needs to be beefed up.”
For Wawanesa, Man. turkey and hog producer Bob Friesen, the Statistics Canada numbers were no surprise.
“Our costs have been going up and our margins have been squeezed,” he said from his farm.
Last year, the cost of feed for his turkey flock rose from the $265 per tonne range to $330.
“The cost increases have been excruciating,” said the CFA vice-president.
“The new government is going to have to realize that if it wants farmers to be competitive internationally, we have to have competitive input costs.”
Statistics Canada reported that last year’s eight percent increase in farm costs was the largest since 1981, driven by fertilizer, feed, land costs, fuel costs and insurance premiums.
During the past three years, the average cost of farming has increased more than 20 percent.
Wilkinson said the impact will be even more devastating this year if commodity prices continue to fall, but costs rise.
Meanwhile, as they have for the past three years, program payments supported by government declined sharply last year, down 19 percent to just over $1 billion.
The strongest income growth was registered by the hog industry, with a 29 percent increase in receipts.
