When Manitoba New Democrats campaign this month in the provincial election race, they will be able to brag in rural ridings that the provincial farm economy is much stronger this year than elsewhere on the Prairies.
According to Agriculture Canada’s farm income projections for 2003, Manitoba’s realized net farm income of $615 million will be 64 percent above the 1997-2001 average and higher in every year since except 2002.
In contrast, Alberta’s projected farm income is barely above the five-year average and down sharply from last year. Saskatchewan farmers in aggregate are expected to earn 50 percent less than the five-year average and 51 percent less than in 2002.
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And the Alberta and Saskatchewan incomes will be propped up by historically high program payments.
“There is no doubt that Manitoba’s outlook is far better than its sister provinces in the West,” said Agriculture Canada income analyst Lambert Gauthier.
He has two explanations – drought and a balanced farm economy.
In an interview April 30, Gauthier noted that the expected prairie income drop in 2003 is largely the result of the aftermath of two years of drought. Manitoba was spared.
But Manitoba also has the most balanced farm economy, he said, and aggregate numbers allow sectors doing well to mask the fact that some sectors are not.
For example, low cereal prices are expected to strip close to $200 million out of the provincial economy this year, leading to an overall crop receipts decline of 11 percent. However, it has a strong cattle sector, hog prices are expected to strengthen and Manitoba’s thriving potato industry is a major contributor to farm income.
As well, average input costs for Manitoba farmers are expected to rise five percent this year while the increase will be eight and 10 percent in Saskatchewan and Alberta.
“So it is a combination of things,” said the Agriculture Canada official.
“It is a year in which many factors are coming together to work for Manitoba.”
At the University of Saskatchewan, agriculture economist Ken Rosaasen said the major reason for provincial disparities this year is the continuing aftermath of two years of drought. Record-level crop insurance payments do not cover the loss of crop or the cost of rebuilding cattle herds reduced during the past two years in the face of drought-induced feed shortages and rising feed costs.
“This really is mainly another example of the echo of the drought,” he said.
Rosaasen said Manitoba’s more diversified farm economy is a clear benefit when select sectors face tough times.
However, he said analysts should not discount Saskatchewan’s efforts over the past decade to diversify. A lower percentage of Saskatchewan acres are in wheat than in neighbouring provinces and provincial farmers have diversified into anything that looks like it might work.
“Our farmers will try anything to make a buck,” he said
“But if the rains don’t come or prices are low, you still end up with falling incomes.”
