Canadian net farm income remains low, despite a modest recovery during the past decade. In the graph above, the black, upper line is gross farm revenue. The lower, gray line is realized net farm income. Both measures are adjusted for inflation. And, in both cases, taxpayer-funded farm support payments are subtracted out, to remove the masking effects these payments can otherwise create. The graph shows farmers’ revenues and net incomes from the markets.
The green-shaded area highlights periods of positive net farm income; the red-shaded area marks negative net income periods. Most important, however, is the area shaded blue—the area between the gross revenue and net income lines. That area represents farmers’ expenses: the amounts they pay to input manufacturers (Monsanto, Agrium, Deere, Shell, etc.) and service providers (banks, accountants, etc.). Note how the blue area has expanded over time to consume almost all of farmers’ revenues, forcing Canadian net farm income lower and lower.
In the 23 years from 1985 to 2007, inclusive, the dominant agribusiness input suppliers and service providers captured 100 percent of Canadian farm revenues—100 percent! During that period, all of farm families’ household incomes had to come from off-farm employment, taxpayer-funded farm-support programs, asset sales and depreciation, and borrowed money. During that time, farmers produced and sold $870 billion worth of farm products, but expenses (i.e., amounts captured by input manufacturers and service providers) consumed the entire amount.
Bringing these calculations up to date, in the 32-year period from 1985 to 2016, inclusive, agribusiness corporations captured 98 percent of farmers’ revenues—$1.32 trillion out of $1.35 trillion in revenues. These globally dominant transnational corporations have made themselves the primary beneficiaries of the vast food wealth produced on Canadian farms. These companies have extracted almost all the value in the “value chain.” They have left Canadian taxpayers to backfill farm incomes (approximately $100 billion have been transferred to farmers since 1985). And they have left farmers to borrow the rest (farm debt is at a record high–just under $100 billion). The massive extraction of wealth by some of the world’s most powerful corporations is the cause of an ongoing farm income crisis.
To leave a comment, click on the graph or this post’s title and then scroll down.
Graph sources: Statistics Canada, CANSIM matrices, and Statistics Canada, Agricultural Economic Statistics, Catalogue No. 21-603-XPE