Denial, denial, denial

[oneoff]

And the off-farm incomes reported by the official Statscan reports are not insignificant. In fact they are greater in every one of the 2004-2008 taxation years than net farm income. As has been pointed out; off-farm income has no business being associated with farm income. Even in the once in a lifetime 2008 year net farm income was less than off farm income (on average) for every one of the crop production farmers.
Over those 5 years those farmers each lost $20,990 after their Capital Cost Allowance was covered. 51% of their net farm income came from government programs. Where those crop farmers covered their farm wage or return on investment should be no mystery BECAUSE THERE WAS NONE.
Don't ever talk to me again about half truths and distorting figures.
I'm concluding that the NFU figures are not stretched. The accountants and industry mouth pieces haven't even attempted to defend the market places performance in giving farmers adequate returns. The truth is surely that the past 25 year's performance of the marketplace (and maybe a lot more years than that before and probably into the future) have not been kind to farmers. Still a lot of supposedly progressive and smart farmers are so self centered and smug that it is a complete frustrating waste of time to point those facts out.

[oneoff]

Each time charliep prods for more elaboration I have accommodated him. Now I challenge charlie to interprt the very Statscan crop production farmer net farm income (for the 2004-2008 period at least and much more preferably for the most recent 25 year period). I'll be watching that his figures for adjusted net farm income include some correction for depreciation (or capital cost allowances); and return to labor and return on investment for the 1.3 million of equity that charlie says each of those farmers have accumulated.
I'll even let charlie have the last word if his analysis and opinion sticks to what I've just said above.

[oneoff]

While waiting for charlie's analysis I thought of another point. That aggragated data is worse than it first seems. I know at least a half dozen farmers that do not chase government programs. There are surely a few hunded or even thosand more. If there were Statscan statistics that broke that minority out from the majority; you would find that the new averages for the majority would show higher government subsidy payments; but what would be most interesting would be which had the best farm economic performance. I certainly know which group is the most dependent on government; and I doubt that it is related to being a socialist; redneck, or NFU member. There are parallels to prostitution.

[furrowtickler]

On oil, the producers manage production - in crop production, mother nature dictates production - huge difference that all of you are missing? Call me crazy, lol. As smart and efficient as we think we may be, mother nature calls the shots sll the time. Very few industries on earth opperate this way.

[furrowtickler]

One other thing to keep in mind - again - livestock, copper, gold, oil, almost everything other than grains, oilseeds can be controled. We can not ever compare what we do to those managed industies - ever!! It is a dead debate realy.

[oneoff]

Whoever is in charge; the world supplies of food don't vary widely from year to year. If its mother nature; then she seems to run on the same "just in time" way of supplying goods too

[cottonpicken]

Ya charlie farming is so frickin great thats why
everyone left and the average age is jurassic,but dont
let your lying eyes fool you.

[charliep]

oneoff

The answer to your question is in the adage. "THERE ARE LIES, THERE ARE DAMN LIES AND THERE ARE STATISTICS".

Actually am a part of a project around competitiveness in the grain and oilseed sector. If the numbers are true, what should be done different?

[furrowtickler]

oneoff - remember 2008 - oh boy, do farmers have short memories!! Grain production variances are subdued by the media and major market players, open your eyes. I remember the third world was going to starve b/c of a world wide shortage of wheat and rice just a few years ago not back in the 1400's.

[charliep]

cottonpicken

The challenge for anyone entering the business of agriculture is to come
up with $1 mln start up equity. You marry it, bury it, win it, steal it, earn
it from outside sources. I would take things one step further and suggest
most farm programs are designed for high equity 50 plus year old farmers
- not for new entrants.

Would assume most who participate here are corporations. The relevant
question (realizing everyone would have had years ranging from good to
ugly) is have you been profitable on a reasonably consistent basis -
accrual accounting including depreciation. If you look at your balance
sheet (at cost and not inflated current values), has your wealth/equity
been growing.

You will tell me I am lying but I am going to suggest I have had the
privilege of being mentored by a lot of very successful farm business
managers. Everyone faces tough times (shit happens) but they have been
able to manage their way through it.

[furrowtickler]

charlie, good points, but time will tell this year. I would take a drought any time over some of the ship guys are facing this year. It is a bad situation for alot with alot of greif on every level.

[oneoff]

Charlie: I suspect that you deal with statistics every day of your life; and I don't think its fair to give an answer that demeans that science to below a pack of damn lies.
The next time you point a client or person such as myself to what are supposed to be credible; and reliable (as possible) a set of data; are you going to warn us that it is a pile of BS and misinterpretations?
I suspect that as an industry spokesperson; you have been asked a touchy question; that should have been handled diplomatically and with some objectivity.
Its a very valid question to ask if farming has for decades been reliant on outside (largely government; and maybe off-farm income) to be viable.
I've seen all sides of farming for close to 40 some years; and am still here to prove that challenges can become much easier to handle with each passing year. A person may even become more financially stable without hardly trying. That isn't the point. Look at the big picture if 130,000 crop farmiers (and falling numbers and aging at the same time; and next to no new replacements). ISN'T THAT OBVIOUS AND EVEN A CAUSE FOR ALARM. And no the answer isn't aliens and woofers; and temporary help from exchange students; or slavery. However; my opinion is that the word serf is becoming very appropriate; and is something I personally won't tolerate for very long. Others may take longer to catch on; but that's why history has to repeat itself every so often.
As you may guess this debate isn't over. And you won't necessarily get the last word because you didn't even try to answer or prove wrong what is a pressing question.
Attempting to distract debate from a valid thesis is offensive. Maybe we should all have to declare our biases and conflicts before being allowed to express opinions that may influence others. I suspect in some cases that would be very revealing.

[charliep]

Actually I don't think the numbers prove your point. Would have to
do my homework but the question for both of us is what goes into
government payments.

Is crop insurance an item? Crop insurance is a program available to
farmers to look after nature impact on yields. There is premium
(recognizing there is government portion). Fair to call a subsidy?
You answer.

Agri-stability and all form prior? Governments attempt to help
farmers deal with the risky nature of agriculture (yield, quality,
price) on a whole farm basis. When below average/poor margin
years occur, the fund is in place to assist a farm in recovering more
quickly (doesn't 100 % offset the pain and timing is an issue).
Societies commitment to helping farmers deal with their risk. Good
or bad is open for debate. The program is not meant to supplement
the income of a poor performing farm and doesn't.

Not sure what other programs are including. Marked gas/farm fuel.
Ad hoc to deal with specific situation would vary year to year.

None of the programs deal with market risk except on a whole
basis (Agristability and old versions).

Is the level of payments good or bad? Don't know but they are
governments commitments to helping farmers deal with risk. None
of the programs are meant to be income support for individuals.

Is the level of farm payments shown in the statscan information a
sign agriculture is in trouble? Good question. I don't think it
makes your point, however. If agriculture is trouble, why is land as
underlying capital asset increasing in value - that would be an
indication of profitability to me? Why are farms expanding in size -
the answer is economies of scale but would a different approach to
farm programs change this trend (or maybe speed it up)? Do the
numbers reflect the 80 20 rule - 20 % of farmers make 80 % of the
income. Your initial points were about over production and impact
on farm income. Would limiting production as you might suggest
improve the farm income situation or reduce the inherent risk
associated with it (weather and international markets)?

[jensend]

charlie how much are crop insurance premiums subsidized? it used to be the fed and prov levels each paid a third of the premium to keep the program actuarially sound as well as all admin. costs. if that's still the case it's a large subsidy and puts a differentslant on what the actual risk/reward situation is for grainfarming.

[charliep]

Not specified for Alberta in the website but 40 % farmer and 60 % feds/SK. I think it
is the same in Alberta although the endorsements (variable price benefit) may
change slightly.

From the Sask crop insurance.

Begin quote.
Premium is cost-shared with producers paying 40 per cent and the provincial and
federal government 60 per cent of costs. Premium dollars are not used to pay for
program administration. The full cost of program administration is cost-shared by
the federal and provincial governments.
End quote.