Off-Farm Income in Alberta

 
 
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  Economics and Competitiveness
This report explores the importance of off-farm income for family farms in Alberta and makes comparisons with the other two Prairie Provinces of Saskatchewan and Manitoba. This report also discusses the major determinants of family farms’ participation in off-farm income employment that are related to individual characteristics of family farm members as well as farm-specific and socio-economic factors.

The analysis shows that off-farm income constitutes a larger portion of average family farm’s total household income in the Prairie Provinces. In 2001-2013, contribution of off-farm income to total household income was 79 percent for Alberta, 70 percent for Manitoba, and 74 percent for Saskatchewan on average. The main source of off-farm income in each province was off-farm employment income (approximately 70 percent). In all Prairie Provinces the off-farm income was steadily growing over time, while farm income remained quite volatile year after year. This demonstrated a high reliance of family farms on off-farm income in order to maintain a higher standard of living and/or being able to invest a portion of off-farm income back into the farm. Therefore, one of the major reasons for off-farm employment is risk management strategy in agriculture (as a form of risk diversification). Another reason is that many family farms are too small to be economically viable without off-farm income.


Annual average off-farm income as a percentage of annual average total income in the Prairie Provinces

Source: Statistics Canada, Cansim Table 002-0024 - Total and average off-farm income by source and total and average net operating income of farm families, unincorporated sector, annual (dollars unless otherwise noted)


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For more information about the content of this document, contact Olubukola Oyewumi.
This document is maintained by Shukun Guan.
This information published to the web on February 23, 2017.