Canada's Farm Income Lowest in 25 Years

OTTAWA - May 27/04 - SNS -- Net farm incomes sank to their lowest level in a generation last year, sinking 43.3% to $4.2 billion, the second consecutive decline, according to the latest data assembled by Statistics Canada.

This level was 37.2% below the previous five-year average, from 1998 to 2002, and the lowest since 1977. Back-to-back droughts in 2001 and 2002 and the diagnosis of a single cow with bovine spongiform encephalopathy (BSE) in northern Alberta last year were among the main factors.

Prairie farmers were hardest hit. Net cash income plunged 72.3% in Alberta, 69.4% in Saskatchewan and 51.2% in Manitoba. Only three provinces recorded gains: Newfoundland and Labrador, Quebec and British Columbia.

Despite record high program payments, lower receipts for crops and livestock dragged down the total farm cash receipts, while farm operating expenses rose 3.7%. Inputs-such as fertilizer and lime, machinery fuel, commercial seed and pesticides-contributed to the higher expenses.

Statistics Canada stressed net cash income can vary widely from one farm to another because of factors such as commodities produced, prices and weather. It does not take into account depreciation or the value of on-farm inventory changes. For details on farm cash receipts in the first quarter of 2004, see today's Farm cash receipts release.

In total, farmers received $34.1 billion from all revenue sources last year, down 5.8% from 2002. It was the lowest level since 2000, yet was still above the average for the previous five years.

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