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For additional information relating to this article, please contact:

Thomas Storring Director of Economics/Statistics
Tel: 902-424-2410Email: Thomas.Storring@novascotia.ca

November 24, 2017
FARM INCOME AND AGRICULTURAL VALUE ADDED ACCOUNTS, 2016

Statistics Canada has released revised results for farm incomes in Canada in 2016.  Net farm income in Canada was revised up to $9.65 billion on farm cash receipts of $60.3 billion.  Canadian farm cash receipts were up by 0.8 per cent while operating expenses (after rebates) were up 0.2 per cent.

In Nova Scotia, farms reported net income of $3.5 million (revised up from -$3.2 million) on revised cash receipts of $595.2 million.  Nova Scotia farm cash receipts dropped by $340,000 (less than 0.01 per cent) while operating expenses (after rebates) rose by 1.7 per cent.  

Nova Scotia farm net incomes amounted to 0.6 per cent of farm cash receipts in 2016, down from  2.1 per cent of farm cash receipts in 2015.  National average net farm income was 16.0 per cent of farm cash receipts in 2016, up from 13.4 per cent in 2015.  The highest net farm income as a share of farm cash receipts was reported in Saskatchewan at 29.7 per cent.  

Net farm income is calculated by subtracting from cash receipts (including in-kind income and positive inventory valuation adjustment), the amount of operating expenses after rebates as well as depreciation and negative inventory valuation adjustment.    

In addition to revised cash receipts and farm net income, Statistics Canada has also released the Agricultural Value Added account for 2016.  This shows how farms generate income from the value added in production.  Net value added is caculated by adding up all revenue sources (sales of products, program payments, in-kind income, positive inventory contributions) and subtracting non-wage input expenses, depreciation and negative inventory costs.  The generation of income from net value added is comparable to the sector's Gross Domestic Product. 

The income generated from value added is distributed in the form of:

  • wages (non-family, family via corporation, family via unincorporated business)
  • interest
  • rent (cash and shares to non-operators)
  • profits (either corporate or unincorporated business returns)

In Nova Scotia, farm net value added contributed $172 million to income.  Nova Scotia's farm net value added is comparable in size to Prince Edward Island's farm sector and larger than the farm sector in Newfoundland and Labrador.  With greater agricultural areas, farm net value added is larger in all other provinces with the largest amounts in Saskatchewan, Alberta, Ontario and Quebec.

Across Canada, there is some variation in the relative distribution of incomes from farming activities.  In Nova Scotia, there is a relatively high share (74 per cent) of net value added paid to labour.  There are higher labour income shares as well in Newfoundland and Labrador (though its agricultural sector is small) and British Columbia.  In the Prairie provinces, business income (corporate profits in particular) makes up between 74 and 91 per cent of farm net value added.  In Ontario, Quebec, New Brunswick and Prince Edward Island, business income is still the majority of net value added, but less than in the Prairie provinces.

In Nova Scotia, Newfoundland and Labrador and British Columbia, unincorporated farm operators reported negative returns in 2016.  All Provinces reported positive corporate farm profits in 2016 with the exception of those in British Columbia.

The composition of farm cash receipts is different in Nova Scotia from the national average.  Across the country, grains (wheat, oats, barley, rye, flaxseed) make up the largest farm cash receipts, followed by cattle and calves.  In Nova Scotia, dairy products and furs make up the largest cash receipts (though poultry and hogs are not reported individually and may appear in the relatively large 'other livestock' data).  

The largest growth in Canadian farm cash receipts in 2016 came from a rise in crop sales, offsetting livestock receipts. In Nova Scotia, the largest gains in farm cash receipts were reported in vegetables, apples, and dairy products. Farm cash receipts for furs in Nova Scotia declined from $87.0 million in 2015 to $54.5 million in 2016.   

Source: Statistics Canada, CANSIM table 002-0001, 002-0004002-0009



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