Farm family reliance on off-farm income continues to grow, according to the latest farm income analysis published by Statistics Canada.
An analysis of farm income tax returns for the year 2000 indicated that off-farm sources accounted for 56 percent of average farm operator income, including smaller farms more dependent on non-farm income, and 73 percent of farm family income. Off-farm income sources range from employment and investment revenue to pensions.
On average, for prairie farms with net operating incomes of more than $100,000, off-farm income accounted for a smaller portion of total income, but still a sizable portion.
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The federal agency said farm family income was rising that year, but not because of the farm operation.
“For a second consecutive year, the overall increase was the result of a gain in off-farm income, which offset a decline in net farm operating income,” said Statistics Canada.
Higher off-farm employment income explained most of the improvement in total income of farm families.”
And that, says the head of Canada’s largest and most influential farm lobby, is a symptom of a deep problem in farm safety net programming.
“Governments have really built into policy assumptions the fact that farmers or their families will bring income onto the farm,” Manitoba farmer Bob Friesen said.
Friesen said Ottawa’s new business risk management proposals within the agricultural policy framework build on that assumption by including training money “to make farmers more employable off the farm …. It is a sad way to go about things when you think about it.”
The federal agency reported that in 2000, one in four farms operated in a deficit. Although the largest number of the deficit-ridden farms were small, low-revenue operations, more than one-in-10 larger farmers with revenues over a quarter million dollars also lost money.
The agency noted that for the first time, there were more livestock operations than grains and oilseeds farms. It said that in 2000, dairy and grain farms recorded the strongest operating profit margins.
However, Friesen said a discussion of profit margins masks a more stark reality in the farm economy. He said the Statistics Canada report shows that reinvestment in capital assets is down on many farms.
“There is the surface story of economic conditions and income, but if you scratch a little deeper you find that a lot of farmers are living on their equity, making up for a lack of income by living off their assets,” said the CFA president.
“That is a very dangerous trend for the industry.”
