Program payments plunge

Sunday, August 23, 2009

by SUSAN MANN

Farmers’ crop and livestock sales both increased during the first half of this year compared to the same time last year but government program payments fell 32.7 percent and that’s what caused a 1.4 per cent decline in total farm cash receipts, Statistics Canada reported Monday.

Total cash receipts, which include crop and livestock revenues plus program payments, were $22.3 billion for this January to June compared to $22.6 billion in the first half of 2008. Program payments dropped to $1.5 billion from 2.2 billion in the first half of 2008.

Canadian Federation of Agriculture president Laurent Pellerin says the current numbers show farmers received a little bit more from the market for the first half of 2009 compared to the first six months of last year but less from government programs so “overall less money for farmers.”

“It’s not because there are fewer farmers or less volume on the market but really the price is not there.”

Statistics Canada analyst Heather Miller says a transition to the new Growing Forward programs from the previous Canadian Agricultural Income Stabilization program is the main culprit for the plunge in program payments. Not all the data for program payments was received by the time the report was issued, she says.

Market receipts from crop and livestock sales were $20.8 billion for the first half of this year. That’s up two per cent from $20.4 billion for the first half of 2008. Crop receipts increased 2.4 per cent to $11.7 billion from January to June compared to $11.4 billion for the first half of 2008.

In the livestock sector total receipts were up 1.6 per cent to $9.1 billion from January to June compared to $9 billion for the same time last year. Hog receipts earned $1.6 billion, a 10.2 per cent gain in receipts compared to the first half of 2008; cattle and calves receipts dropped 3.2 per cent to $2.9 billion; and cash receipts in the supply-managed sector, which accounted for 45 per cent of the total livestock receipts, increased 2.3 per cent.

Miller attributes the rise in hog receipts to a greater percentage of weanlings being exported compared to slaughter weight animals, which affected the weighted average price used to calculate hog receipts. Marketings are calculated by taking the number of animals sold times the average weight of all of those animals. Under this formula, weanlings end up being worth more than market hogs.

Farm cash receipts measure farm businesses’ gross revenue only. BF