December
8, 2003: Overall, for 2002, Canadian total farm cash
receipts of $36.0 billion were 13.2% higher than the previous
five-year average, according to a Statistics Canada report
last week. An encouraging statistic-- but you would be totally
misled about the financial health of the business of farming
in Canada if that was the only number you considered important.
Knowing the total amount of money coming up farmers' laneways
from sales is not even half the story. What has happened to
farm operating expenses and what was sold to earn all that
cash are just as important. Statistics Canada told the whole
story and it was bleak: 2002 was the worst year in more than
30 years for the money Canadian farmers had left over after
operating expenses. For some growers in Alberta and Saskatchewan
the situation was worse than in the Depression of the 1930's.
To keep that $36.0 billion coming, farmers not only sold
their 2002 crops but also liquidated crop inventories and
sold off livestock numbers.
You may recall the effort last year to truck and train hay
to the west to help those who faced liquidating prized cattle
herds due to lack of hay and pasture. Drought hit large parts
of Saskatchewan and Alberta for a second year in a row; farmers
responded by trimming the national cattle herd by 4.3%; the
Alberta herd, the biggest in the country, was cut back by
almost 8%.
Back-to-back droughts on much of the prairies have forced
farmers to rely on crop inventories to keep cash income ahead
of expenses. Farmers sold off crop inventories worth almost
$1.5 billion in 2002. Farm-owned stocks of major grains have
now dwindled to extremely low levels.
Meanwhile farm operating expenses have continued to nip up
-- another 2.1% in 2002.
What really counts in all these numbers is what farmers have
left over to pay down the mortgage, re-invest in the future
of their businesses, and pay for family living expenses -
their total net income. In 2002, the total net income of Canadian
farmers collapsed by more than 50% from 2001 to just $1.3
billion - the lowest in more than 30 years. In Ontario, total
net income crumpled by 45%. In Alberta and Saskatchewan total
net income was completely wiped out.
These numbers tell it all. There is an urgent need to implement
the Canadian Agricultural Income Stabilization program with
its better focus on need than previous programs such as the
Net Income Stabilization Accounts.
Needs shift—2003 has beef markets in total turmoil,
pork prices well below cost of production and all our exports
struggling with a strong dollar. Safety net programs that
shift according to need are essential to farming's future.
__________
Statistics
Canada's report on net farm income for 2002
__________
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