Balance sheet of the agricultural sector

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Equity in Canada's farm sector continued its long-term increase in 2010, rising 3.1% or $8.6 billion to $282.4 billion. Strong gains in the value of assets outpaced a rise in liabilities.

On a provincial basis, equity improved in eight provinces in 2010. Equity in Alberta recorded the largest increase, up 4.5% or $3.7 billion. Ontario (+3.5%) and Saskatchewan (+2.5%) also posted relatively large increases.

In British Columbia, the increase in total liabilities exceeded the increase in total assets, resulting in a slight decline in equity, the first in 13 years.

The total value of farm assets increased $12.1 billion to $343.3 billion in 2010. This increase was over three times the gain of $3.5 billion in farm liabilities, which rose to $60.9 billion.

The increase in the value of assets was extensive. Key movers included the value of farm real estate, which rose by $6.1 billion to $232.0 billion, and the value of current assets, which was up by $1.9 billion.

Breeding livestock was the only category to decline in 2010.

The value of assets improved in every province. Alberta led the way, up 4.8% or $4.6 billion, followed by Ontario and Saskatchewan. Total liabilities also rose in every province, except for a modest decline in Nova Scotia.

The debt-to-asset ratio, which measures the dependence of farm business on debt, was 17.7% in 2010. This was up for the third consecutive year.

The interest coverage ratio, which assesses the ability to cover interest charges with the net income generated (before interest and taxes), rose to 2.97 in 2010.

This followed a sharp decline to 2.83 in 2009, after the ratio had reached a record high of 3.93 in 2008. The period of sustained low interest rates saw interest costs decline 4.9% in 2010, following a substantial 19.9% drop in 2009.

Return on equity remained unchanged at 1.6% in 2010. The ratio had achieved a recent peak of 3.3% in 2008, its highest point since 1996.

Note: Assets and liabilities in the agriculture sector's balance sheet include those of farm businesses and non-operator landlords (for farm real estate assets leased to farm operators and the corresponding liabilities) and exclude the personal portion of farm households. This most closely reflects the assets and liabilities used in the production of agricultural products.

Available on CANSIM: table 002-0020.

Definitions, data sources and methods: survey number 5029.

The publication Balance Sheet of the Agricultural Sector: Agricultural Economic Statistics, June 2011, Vol. 10, no. 1 (21-016-X, free), is now available. From the Key resource module of our website under Publications, choose All subjects, then Agriculture. The publication, Farm Business Cash Flows: Agriculture Economic Statistics, June 2011, Vol. 10, no. 1 (21-018-X, free) is also available.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Russell Kowaluk (613-951-0600; russell.kowaluk@statcan.gc.ca), Agriculture Division.