Governments, think-tanks attempt positive spin on low farm income levels

When invited farm and food sector representatives gathered in Ottawa recently for an Agriculture Canada-organized debate over program and policy needs by 2020, the department had a scene-setting document ready.The seven-page backgrounder, Structure and Performance of the Agriculture and Agri-food Sector, laid out the department’s view of the current state of the industry that could be used as a starting point for the discussion.“Real net operating income per farm has been increasing over the past two decades, reaching $45,500 in 2008,” it said. “This is 78 percent above the income reported in 1990.”The average net worth of farms has increased to $1.3 million in 2008, far higher than the average Canadian family net worth. Of course, the bigger the farm, the higher the net operating income and the net asset value.Meanwhile, the National Farmers Union has been aggressively promoting its analysis that for the past quarter century, farmers have produced more than $750 billion worth of goods and received no income from the market, sustained only by program payments.And data provided by Statistics Canada shows that while 2010 farm income projections of dramatic declines have been described by farm leaders and politicians as devastating, projected net operating income among grain and oilseed producers this year would still be higher than the average since 1993, based on farmer income tax filings.Depending on the prism you look through, these varying and conflicting opinions can be defended. It is a battle over farm income statistics.The optimistic Agriculture Canada view uses the slippery “net operating income” number that does not take account of depreciation costs, merely revenues (including program payments) minus expenses. It also does not consider the record farm debt.The Statistics Canada data, while putting 2010 projected income decreases into some perspective, also miss those points.The NFU data are correct but payments, often from programs the NFU fought to create, have been included in farm revenues ever since governments began to support farmers.The NFU numbers address its criticism of free trade deals, corporate concentration and market failure rather than farm incomes.For years, farm media reports on government farm income numbers have deducted program payments from projected income to show the lack of returns from the market.Perhaps the difference these days is a relentless campaign by governments and think tanks to put the most positive spin they can on farm income, since it justifies an increasing tendency to create support programs that provide less support to those who need it most.At a recent lunch, a longtime farm politics insider said he sees a concerted effort by governments and economists to minimize farm income pain. “There is a real drive to make agriculture look rich and overall, that simply masks the hurt, the equity erosion, the debt that is sustaining the industry right now.”All sides have their statistical support. And if you torture statistics long enough, they will tell you what you want to hear.