Reall real BIG Lies

[oneoff]

The Denial Denial Denial thread has produced the whole range of opinions; but no one has been willing to agree or accept the Statscan figures (which don't necessarily come from telephone interviews) Lets try to stick to a specific topic in this thread.

The question is have farmers received adequate returns directly from the marketplace for their production (in the 2004-2008 years or maybe in the last 25 years.)
OK charliep Lets go in baby steps. You say the numbers don't prove my point. Then what are the numbers for net farm income (obviously not including off-farm income and obviously giving an allowance for return to labor and obviously a fair return to equity for the 1.3 million that you say each farmer is worth)
You shouldn't have to do your homework on that; because surely someone knows this situation very well. If there is no answer available; then I conclude that this country and world are flying blind; and there is no sense trying to soar with eagles when you are afterall just a turkey. But when literally billions are spent in government subsidies every year; surely everyone knows the fundamentals of the problem. But probably not; because you then say what is a government subsidy. Well for starters its pretty obvious to me its every dollar of crop insurance premium paid by all levels of government; every costly stability program attempted; every dollar exempted for PST; all the marked fuel not collected; the wages paid for administering the programs; the security and office rented; costs of adjustesr; auditor costs etc. etc and on and on. We shouldn't have to be questioning that detail either should we? These substancial payments were apparently deemed to be required allow most farmer to survive another year; and to head off farmers, en masse, having to quit production (because they can't afford these losses). They are and were government payments to farmers. Make no mistake; without government subsidies in the past 25 years; farming would not be recognizable as it is today. Having said that; there would still be farming and an agriculture industry today; just slightly different hurts in the past. The answer also isn't to drag the rest of the agriculture industry down to farmers levels. This has been suggested too. That really would have hurt more than just farmers.
Its sad to think I have to direct spokepersons back to the same Statscan data that you directed me too. Its even sadder that you won't accept those figures or have to say that you're not sure what they mean. This is what a really big lie is all about.

[ajl]

Frequently farmers deliberately reduce income in order to avoid taxes so that is one way in which the stats can figures are misleading. Unfortunately government likes to play in the agricultural industry. If subsidies did not exist, input costs would be cheaper. I wish agri stability and CAISP (Charted Accountant Income Stabilization Program) did not exist but they will not go away until government goes broke which will not be long now. In the mean time you have to participate since your input costs are higher because of the programs. Input suppliers know these programs very well. The CWB still exists. Government takes in a lot of tax dollars from the fat cat salaries at the CWB which is a parasite on our backs. So if they send us a few bucks in partial compensation for stuff like that so be it.

[oneoff]

But surely there is a reason for the Federal and provincial governments passing out government payments to farmers on an ongoing basis; and atempting to create new and improved stability programs.

There mustn't be adequate farm income coming from where it should come from and that is the sale of farm production. Doesn't that make sense; and prove the point there isn't adequate income from farming on its own.
I think the stats prove that; and its a case of being overwhelmed by deperation; lack of contro and power and most surely; red herrings.
Negative numbers and red ink are stong signs of ominous problems.

[charliep]

So you are saying that government should get out of the risk management
game and let the market place decide winners and losers. The only risk
management products that be offered are private sector and full cost. Not
sure where you stand on years like the current one where there is some
event outside normal consideration will have a major impact on individual
farmers viability even if they are good managers both agronomically and
financially. Let the chips fall where they may including a loss of equity as
land values adjust to a new reality?

[oneoff]

yes!!! Now you're talking the way true blue cattlemen looked at the free enterprise system for most of their lives. Socialism, communism aren't widely embraced by farmers; and yet those same people have always been the quickest complainers and first to attempt to get to the public troughs. For those who quickly note the instances of handouts to the auto sectors or banks or thwhat happens in the rest of the world or whatever; I,ve got the most respect for those relatively few who have some principles and are very reluctant to lower themselves to someone else's level. That certainly isn't your average farmer. Nowadays, you see more restraint from socialists than most farmers.

[oneoff]

All the current system does is make sure that you can't compete; if you don't get on the government payment bandwagon. Some government or industry decision can and will destroy new sectors like organic farming. Tell me it isn't happening. Tell me that monopoly control over seed supplies isn't here and the grip tightening quickly. Oh sure they will leave you with the garden type local markets (for the present).
Farmer's dignity has been compromised. You don't hear much about "sailing your own ship" or "things worth doing should be able to stand on their own merits" or "those long term sustainable industries (farming included) must be viable in the long run though earnings of their own"

Twenty-five years or more of this experiment should be enough to demonstate that it will inevitably end with vertical integration with the rest of the agricultural industry. Then Statistics Canada will be able to report the profits (and they will be long term profits) for raw produce though to consumer food purchases. Single entities will control the whole process. One possibility is that serfs may be a part of the industry. But remember serfs aren't farmers as we now think of farmers. I'll bet I could refer people to history books for reference to how and why the prairies were settled not much more than 100 years ago. Some of the story would have direct parallels to what is currently happening in today's times; but the perception of traditional farming is dead for all time in Canada.

[oneoff]

Don't try to scare farmers with the prospect of lower land values. The exact opposite may indeed happen.
If we could get institutions like the CWB off our backs and the same for government control; and Monsanto and their cohorts who intend to and will swallow up all gains from advances in technology; and start to be reliant on our own abilities; then maybe there would be some interest from new young enthusiastic entrants.

Yes there are ways to get them started; and its doen't have to involve financing 1.5 million of assets. Can't any one see the chilling effect of 25 years of dismal negative net farm income (less the similar amount of off farm income; nevermind absolutely no return for your labor or return on investment or risk). Thats why there is little new blood. Farming as known in the past is probably dead.
I should repeat that in stronger words; but isn't that the bottom line truth........
I have made a practice of checking back on my past predictions. The record isn't all that bad. Ten years from now I intend to check the progress on this topic.

[TOM4CWB]

Charlie,

I have to chuckle!

I remember in 1980 when insurance rates jumped 25% because the 'Ocean Ranger' sunk.

If anyone thinks 'private' insurance solves problems... think again. 9-11 paid billions in payouts that joe public is repaying. BP has no doubt some insurance on the Gulf of Mexico oil mess.

If anyone thinks cross subsidization is a western Canadian thing... think again!

Good points on CCA and depreciation.

Why pay income tax... when decent equipment that works when needed... solves two problems with one purchase!

(I should get a better deal on our next new iron from JD!!!)

An in depth look at farming is as it always has been; farm land appreciates. Every other 'real' asset depreciates. Be happy and participate... or have ulsers.

Intergenerational farms have done well... because they didn't cash in every generation.

If you are not happy farming... don't torture your family and force them to farm if you hate it!

[oneoff]

The supplement and welfare cheques are in the same category as government farm payments in my books. If you want about 30% of your farm paycheck to come from the government then more hair on you.
I know LWebers link says that it was 17% in 2009; but theres that sneaky little off-farm income included as if it is an integral part of your farming operation. And off-farm income is year in and year out just about equal to net farm income. I've got no problem arguing that the government payments are thus really double 17% or about 35% of the income the average farmer works on from their farm operation.
Lets not hear of welfare bums or people abusing the social assistance programs in the next while.

[TOM4CWB]

Oneoff;

I think you miss the point.

$1M gross family farm.

$970,000 spent in farm economy.

If the gov sends out $50K to top up a farm family and as always they spend that too... how is that bad?

It is all a matter of perspective!

[TOM4CWB]

Remember the multinationals that pay 50% tax on large profits extracted from your farm... that gov. forgot to assure competition.... to keep costs down?

THis farm income problem is an expense problem... and gov's are laughing all the way to the bank... and from bank profits too!

Organic is trying to beat the system... by not buying traditional imputs!

[cottonpicken]

Oneoff,economics question,do you know what your
talking about when it comes to macro-economics?

[oneoff]

OK Tom; You spend almost a million dollars to earn a million dollars farming. On a good year after you took your depreciation or capital cost allowance into account you would be in the hole. And you forgot that you hadn't been paid anything for your labor too.
On the couple of years in your farming career where you should have made a nice killing you make 40,000 (as in 2008 and its again before your wages and depreciation and return on investment and nothing for your risk because we both know that at least a few times in a lifetime some bad odds are just going to catch you.) I still remember losing what should have been an 8 month opportunity to get dollars more for my durum than the CWB finally paid me. And for every dollar I didn't make; it was exactly one dollar less in net farm income that I should have had. From the Statscan data it is evident that I had lots of company because net farm income was still less than 40,000 on average for crop production farmers in 2008.
Are you fairly and adequately compensated so far. Then the government helps out with $50,000.
Remember you're running a million dollar operation and are being left with the pennies year after year.
Its like Her Majesty and road allowances or Crown Land. The old girl doesn't have the time to look after those lands herself; so she delegates rural municipalities to manage them in her absence. As you say; its all in the perspective as to who really owns and controls anything.

[oneoff]

Cotton; All I can say is that I have certainly forgotten much more than I currently know.
I try to rely on logical arguments and common sense; and when I have to; a little bit of homework isn't out of the question.
I have friends who have their doctorate in economics and their business acumen never has been any more astute than mine.
The answer is no; Maybe i'm like the consultant who said he didn't even know how to spell the word; but now he rrr's one.

[cottonpicken]

Well i know the educatedmatypes are taught in a
very flawed doctorine called keynsianism.They have
a hard time explaining resent current events and
have an even poorer record of what is coming.I
stopped bringing it up a while back.

One thing i know to be true,depressed commoditie
prices is global and cyclical with a good degree of
manipulation...not enough space on this infinite
page to begin.

Seeing what is happening is easy as long as you
believe your lying eyes.