Canadian farm net cash income higher in 2020

Government payouts to farmers went up too, but there’s a good reason

Net government program payments to Canadian farmers, excluding farmer premiums and money from private programs, totalled $2.4 billion in 2020.

Canadian — and Manitoba — farmers saw a jump in government program payments in 2020, as well as higher gross revenues and net cash income.

Increased government payouts might seem counterintuitive, but much of the money came to farmers through crop insurance and AgriStability due to poor crops in 2019.

“Direct program payments rose 10.8 per cent in 2020 to $3.5 billion, following a 40.6 per cent increase in 2019,” Statistics Canada said in a release May 26. “Crop insurance payments rose 21 per cent, largely the result of payments related to crop damage in 2019, when growing and harvest conditions were especially poor in the Prairies.”

That $3.5 billion included payments from private sector programs such as hail insurance.

Why it matters: Because farming, and the economic spinoffs it creates, are important to Canada’s economy, it is warranted to offset some of the risks farmers face.

Net government program payments to Canadian farmers, excluding farmer premiums and money from private programs, totalled $2.4 billion in 2020, StatsCan’s May 20, ‘Direct Payments to Producers’ table shows.

That’s up 15.6 per cent from 2019’s net government payments to Canadian farmers of $2.08 billion.

The table breaks out a long list of gross and net government program payments to farmers nationally and by province.

Nationally, 2020 provincial stabilization payments to farmers were up 52 per cent. Almost two-thirds of the increase was in Quebec where lower hog prices triggered payments, StatsCan said.

Livestock price insurance program payments tripled in Alberta as cattle prices fell sharply in the second quarter of 2020, during the first wave of the pandemic.

StatsCan reported 2020 cattle livestock insurance payments to Manitoba farmers of -$156,000. Manitoba cattle producers paid more in premiums than they collected, resulting in the negative figure.

Most of the national payouts in 2020 and 2019 were from three government programs: AgriStability, provincial stabilization and crop insurance, with the latter accounting for the highest amount, $1.01 billion and $725 million in 2020 and 2019, respectively.

Countrywide AgriStability payments totalled $453 million and $366 million in 2020 and 2019.

In 2020 total net government payments, not including farmers’ premiums or private program payments, totalled $192.6 million in Manitoba, up 56 per cent from $123.3 million in 2019, StatsCan figures show.

AgriStability and crop insurance payments to Manitoba farmers in 2020 of $60.3 million and $19.9 million, accounted for 42 per cent of total government net payments.

2020 AgriStability and crop insurance payouts totalled $80.2 million, up 10 per cent from $72.6 million in 2019.

Total net cash farm income was up more than 30 per cent for Manitoba and Canadian farmers collectively in 2020.

Manitoba farmers’ net cash income of $1.75 billion was up almost 32 per cent from $1.33 billion in 2019.

Last year Canadian net farm cash income of $18.1 billion was up $4.8 billion from 2019 — a 36.5 per cent increase.

Net farm cash income is defined as gross revenue minus operating expenses.

Rising crop receipts fuelled by strong export demand, combined with lower machinery, fuel and fertilizer prices, pushed farmers’ net income higher in 2020, StatsCan said.

While Canadian farmers’ expenses of $54.03 billion were up just 1.27 per cent, cash receipts of $72.2 billion jumped 8.3 per cent.

Last year saw the biggest jump in farm cash receipts, which is revenue from crop, livestock and government programs, since 2012, StatsCan said.

About the author

Reporter

Allan Dawson

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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