Reporting Guide – 2017 Farm Financial Survey

Integrated Business Statistics Program (IBSP)

Reporting Guide

This guide is designed to assist you as you complete the 2017 Farm Financial Survey. If you need more information, please call the Statistics Canada Help Line at the number below.

Your answers are confidential.

Statistics Canada is prohibited by law from releasing any information it collects which could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act.

Statistics Canada will use information from this survey for statistical purposes.

Help Line: 1-877-949-9492

Table of contents

Reporting instructions

Additional information that may be useful in the completion of this electronic questionnaire include the operation’s 2017:

  • financial statements
  • tax files
  • AgriInvest Annual Statement of Account
  • AgriStability Calculation of Program Benefits Notice.

Also:

  • individual T1 and T4 tax forms
  • market value assessments of land and buildings from sources such as property tax assessments or local real estate listings.

Definitions

Legal Name

The legal name is one recognized by law, thus it is the name liable for pursuit or for debts incurred by the business or organization. In the case of a corporation, it is the legal name as fixed by its charter or the statute by which the corporation was created.

Modifications to the legal name should only be done to correct a spelling error or typo.

To indicate a legal name of another legal entity you should instead indicate it in question 3 by selecting ‘Not currently operational’ and then choosing the applicable reason and providing the legal name of this other entity along with any other requested information.

Operating Name

The operating name is a name the business or organization is commonly known as if different from its legal name. The operating name is synonymous with trade name.

Current main activity of the business or organization

This question verifies the business or organization’s current main activity as classified by the North American Industry Classification System (NAICS). The North American Industry Classification System (NAICS) is an industry classification system developed by the statistical agencies of Canada, Mexico and the United States. Created against the background of the North American Free Trade Agreement, it is designed to provide common definitions of the industrial structure of the three countries and a common statistical framework to facilitate the analysis of the three economies. NAICS is based on supply-side or production-oriented principles, to ensure that industrial data, classified to NAICS, are suitable for the analysis of production-related issues such as industrial performance.

The target entity for which NAICS is designed are businesses and other organizations engaged in the production of goods and services. They include farms, incorporated and unincorporated businesses and government business enterprises. They also include government institutions and agencies engaged in the production of marketed and non-marketed services, as well as organizations such as professional associations and unions and charitable or non-profit organizations and the employees of households.

The associated NAICS should reflect those activities conducted by the business or organizational unit(s) targeted by this questionnaire only, as identified in the ‘Answering this questionnaire’ section and which can be identified by the specified legal and operating name. The main activity is the activity which most defines the targeted business or organization’s main purpose or reason for existence. For a business or organization that is for-profit, it is normally the activity that generates the majority of the revenue for the entity.

The NAICS classification contains a limited number of activity classifications; the associated classification might be applicable for this business or organization even if it is not exactly how you would describe this business or organization's main activity.

Please note that any modifications to the main activity through your response to this question might not necessarily be reflected prior to the transmitting of subsequent questionnaires and as a result they may not contain this updated information.

Reporting period information

Question 1

Fiscal year-end refers to the last day of the twelve-month period a business uses as its income tax year.

If this operation’s fiscal year-end is close to the survey date, e.g., April 30, 2017, and the current financial statements are not yet available, use the most recent financial statements, e.g., April 30, 2016.

Characteristics of the operators and operation

Question 1

A farm operator is an individual responsible for the day-to-day operation of the farm, who participates in the decisions to borrow money, to rent, buy or sell assets and to manage debts.

Include farm owner-operators and hired managers.

Legal operating arrangement

Question 6

Definitions:
A sole proprietorship is a farming business in which there is one person that makes the business decisions, takes the risks and makes the profits.

A corporation is a farming business that has been registered with a province as a legal entity.

A partnership is an agreement to share the profits and losses of the business and is formally registered as such with the Canada Revenue Agency for tax purposes.

The partners jointly own the operation’s property and share a joint bank account, joint accounting, single financing, use of the partnership name, etc.

A cooperative and communal operations is a farming business that is operated by a community of people. (All Hutterite colonies are considered to be cooperatives even if they are incorporated).

A joint venture is similar to a partnership, but is not exactly the same. The parties in a joint venture are usually separate businesses, which join together to accomplish a project. Each party contributes assets to the joint venture. Often, one of the partners is an operator and the others provides the use of capital for the operation.

A trust is when management and decision making powers of an investment or business is held by a third party. Therefore, the owners cannot make decisions concerning the business. However, the actual owners still receive the profits generated by the trust.

Family’s percent ownership for corporations and partnerships:
• if the partnership is husband and wife only, enter 100%
• if the partnership is owned by siblings, enter only the share belonging to the family of the selected operator.

Land use

Question 16

Rounding procedures for this section:

  • round all areas of land to the nearest whole number, e.g., for “17.5 acres” round-up to “18 acres”
  • if the area of land is less than half an acre, round-up to 1 acre.

Workable land includes all arable or cleared land including area in field crops, vegetables, sod, nursery, fruits, berries and nuts, summerfallow, and tame or seeded pasture land.

Non-workable land includes land that is not or cannot be used for agricultural purposes plus land on which all farm buildings are located:

  • all idle land (land not used for agricultural purposes) includes woodlots, sugarbush, tree windbreaks, bush, ponds, bogs, marshes, sloughs, buffer zones, etc.
  • land on which farm buildings are located including, farm houses, barns, lanes, etc.

Question 17

Cropland is land which has not been left in its natural state. It is workable land which is tilled either annually or periodically to produce agricultural products. This includes field crops, land used to produce fruits and vegetables, greenhouses, sod and nursery production, etc.

Cropland

Question 18

Cropland is land which has not been left in its natural state. It is workable land which is tilled either annually or periodically to produce agricultural products. This includes field crops, land used to produce fruits and vegetables, greenhouses, sod and nursery production, etc.

Market value is the most probable price an asset would bring in a competitive and open market under all conditions required for a fair sale, with buyer and seller each acting prudently and knowledgeably.

Sources for market value:

  • assessment on a property tax bill
  • estimate based on recent land sales in the area
  • if money has been borrowed from a lending institution, the real estate value has likely been estimated.

Question 19

Cropland rented from others is workable land that you rented in order to cultivate and produce agricultural products.

Include land rented for field crops, e.g., tame hay, wheat, canola, potatoes, sugar beets, land used to produce fruits and vegetables, greenhouses, sod and nursery production, etc.

Capital investments

Question 23

Capital investments are expenditures for long-term assets, generally expensed using capital cost allowance/depreciation. Although not depreciable, land and living things such as trees, shrubs and animals are capital investments.

Question 24

b) House construction or renovation includes construction of a new farmhouse or any renovations to the existing farmhouse.

f) Environmental protection include:

  • Buffer strips: strips of vegetation which protect natural areas (especially watercourses) from surrounding land uses
  • Windbreaks and shelterbelts: bands of trees and shrubs designed to shelter crops, livestock, soil and buildings and to control snow accumulation
  • Fences for waterways protection: fencing exclusively to restrict livestock from watercourses in order to prevent erosion and water contamination.

If this operation incurred expenses to create an environmental plan, these expenses should be reported as operating expenses.

i) Quota is an entitlement or right to sell or deliver a certain amount of an agricultural product. This pertains to six products: milk, table eggs, hatching eggs, chicken, turkey, and tobacco.

Capital sales

Question 26

Capital sales arise from the sale or trade-in of capital assets, such as machinery, land, buildings, breeding and replacement livestock, and quota. This is opposed to farm revenue, which is the sale of products produced on the farm, such as livestock or crops.

Question 27

Capital sales arise from the sale or trade-in of capital assets, such as machinery, land, buildings, breeding and replacement livestock, and quota. This is opposed to farm revenue, which is the sale of products produced on the farm, such as livestock or crops.

a) Where land and buildings have been foreclosed on or transferred to a lender, use best estimate of the market value of the property. This might be obtained from: an assessment on a property tax bill, an estimate based on recent land sales in the area, or if money has been borrowed from a lending institution, the real estate value has likely been estimated.

c) Quota is an entitlement or right to sell or deliver a certain amount of an agricultural product. This pertains to six products: milk, table eggs, hatching eggs, chicken, turkey, and tobacco.

d) Breeding and replacement livestock includes the value of breeding and replacement livestock sold, excluding culls. Culls are female or male breeding stocks that are no longer productive. Do not report culls sold for slaughter as a capital sale (this is considered revenue).

Farm assets of this operation

Question 28

Assets refer to all tangible and intangible items of value owned by this operation. They are the sum of current assets, breeding and replacement livestock, market livestock, machinery and equipment, quota, land and buildings, and financial investments.

Please report market value — the most probable price an asset would bring in a competitive and open market under all conditions required for a fair sale, with buyer and seller each acting prudently and knowledgeably. If the exact market value is unknown, please give the best estimation.

Short-term farm assets are cash and any other asset that, in the normal course of operations, is expected to be converted into cash or consumed in the production process within one year or within the normal operating cycle (where the cycle is longer than a year).

a) Accounts receivable are monies which are owed to the operation usually arising from the sale of goods or services, such as crops, livestock or custom work, and from program payments, to be paid to the operation within 12 months. If the money is to be repaid after 12 months or over a series of years, it is considered a long-term note receivable and should be reported as “other long-term farm assets” (section “j”).

b) Cash and short-term investments include surplus cash (usually arising from the sale of crops or livestock) which is invested for a short period of time until such time as the cash is again required in the farm business, usually to purchase new inputs such as fertilizer or feeder livestock. Included are certificates of deposits with a maturity of less than 12 months; if the maturity is 12 months or more, the amount should be reported as a “long-term investment” (section “I”).

c) Inventory – Supplies on hand (inputs) refer to farm supplies that are to be used in the farm business. Crops for sale are not considered inputs and should be reported as “crops for sale” (section “d”).

d) Inventory – Crops for sale include all harvested crops destined for market and greenhouse and nursery horticulture products for market.

e) Other short-term farm assets includes notes receivable, which are claims issued as evidence of debt e.g., promissory note. Only report here the amount expected to be repaid within 12 months. Amounts to be repaid after 12 months should be reported as “other long-term farm assets” (section “j”).

Long-term farm assets have a useful life of greater than one year. Such an asset, which can be either a tangible or an intangible item, is usually not purchased for resale, but is to be used over time to produce saleable products.

f) Sources for the market value of farmland and buildings:

  • assessment on a property tax bill
  • estimate based on recent sales in the area
  • if money has been borrowed from a lending institution, the real estate value has likely been estimated.

h) Quota is the right to sell an agricultural product such as milk, poultry, eggs and tobacco. A quota can be a separate asset or can be attached to the land and buildings (poultry).

Quota has a market value and is considered an asset. Please ensure that the market value of quota is reported e.g., what the operation would have been able to sell its quota for on this operation’s fiscal year-end date. It may help to multiply quota per animal by the number of animals owned by the operation on this operation’s fiscal year-end date.

j) Other long-term farm assets include:

  • drying facilities
  • grocery store, shop or market, or fruit stand owned by this operation
  • long-term greenhouse and nursery products such as trees and shrubs
  • onion/potato/carrot/apple storage
  • rental unit / rental property owned by this operation
  • retail business owned by this operation (not including distinct companies)
  • sawmills
  • notes receivable expected to be repaid after 12 months.

Livestock and poultry assets

k) Breeding and replacement livestock are animals that are expected to be on the operation for more than one year – animals acquired or raised for the production of progeny, or for the production of a livestock product.

l) Market livestock are animals that are expected to be on the operation for less than one year. Include all poultry as market livestock.

Farm debt outstanding

Question 30

a) Money owed to banks, caisses populaires, credit unions, trust companies, treasury branches or credit card debt

  • Short-term includes balances on operating lines of credit, short-term loans, credit card balances, cash advances, and any overdue payments. Also include short-term loans guaranteed by governments but obtained through a financial institution
  • Long-term includes mortgages and long-term loans. Also include long-term loans guaranteed by governments but obtained through a financial institution.

Financière agricole du Québec is considered a financial institution and amounts owed to it should be reported here.

c) Money owed to the Advance Payments Program (APP)

The APP provides cash advances (up to $250,000) guaranteed by Agriculture and Agri-Food Canada (AAFC). Some APP loans may have 18-month repayment periods, however, for this survey, please record all money owed to APP as short-term debt.

Please record loans from the Commodity Loan Program (CLP) from the Agricultural Credit Corporation (ACC) here as well (Ontario only).

d) Money owed to machinery and supply companies or feed companies

Debts which are owed for the purchase of inputs, also referred to as accounts payable.

Include seed grain (input), fertilizer (input), feed (input), fuel for machinery, heating fuel, propane, purchase of vehicles or agricultural equipment financed by the dealer, monies owed to poultry suppliers (breeder-hatcheries or breed flock operations).

e) Money owed to family members, shareholders, or private individuals

Include parents, spouse, siblings, parent company, previous owner of the operation, another farm, e.g., for land rental or custom work, in-laws, sister company.

f) Amount of money owed to government agencies

Include farm loan board, agricultural credit / lending agencies.

Exclude:

  • deferred taxes
  • loans guaranteed by provincial governments or agencies, e.g., Investissement Québec, should be reported as debts to banks, caisses populaires, credit unions, trust companies or treasury branches).

g and h) All other short or long-term debt

Include:

  • accounts payable (other than to machinery and supply companies or feed companies)
  • agricultural co-operative
  • business Development Bank of Canada
  • Canadian Mortgage & Housing Corporation
  • freight bill
  • income tax to be paid (provincial and federal)
  • meat packing plant / abattoir
  • over-payment or claw-back, e.g., if the government asks for a portion of a previous payment to be repaid to them
  • property tax
  • public utilities, e.g., electricity or telephone
  • Société d’aide au développement des collectivités (SADC)
  • other (enter in comments).

Exclude amounts to be paid for:

  • leased vehicles or agricultural equipment
  • accounts payable to machinery and supply companies or feed companies.

Question 31

Loans guaranteed by provincial governments or agencies, e.g., Financière agricole du Québec and Investissement Québec, should be reported with the institutions (banks, caisses populaires, credit unions, trust companies or treasury branches) which disbursed the loans and not as government loans.

AgriInvest

Question 32, 34, 35, 37, 38

AgriInvest is a self-managed producer-government savings account that allows producers to set money aside which can be used to recover from small income shortfalls, or to make investments to reduce on-farm risks.

Program payments and insurance

Question 39

The Advance Payments Program (APP) is a federal loan guarantee program which provides agricultural producers with easy access to low-interest cash advances.

Question 40

AgriInsurance (also known as provincial crop or production insurance) is a federal-provincial-producer cost-shared program that stabilizes a producer's income by minimizing the economic effects of production losses caused by natural hazards. AgriInsurance is a provincially delivered program.

Question 41

AgriStability provides support when you experience a large margin decline. You may be able to receive an AgriStability payment when your current year program margin falls below 70% of your reference margin.

Question 42

Reference margin is the average program margin (allowable income minus allowable expenses) for three of the past five years (the lowest and highest margins are dropped from the calculation). The reference margin will be limited to the lower of the historical reference margin or the average allowable expenses for the years used to calculate the reference margin.

Questions 43 and 44

AgriStability provides support when you experience a large margin decline. You may be able to receive an AgriStability payment when your current year program margin falls below 70% of your reference margin.

Custom or contract feeding

Question 45

Report the total number of livestock fed for the whole year.

Include custom or contract grazing.

Exclude animals owned by this operation.

Question 46

Custom or contract feeding is where livestock or poultry are fed and raised by the operation for somebody else.

Include revenue received for the total number of livestock and poultry custom or contract fed for the whole year.

Question 48

Please report for all cycles of livestock and poultry custom or contract fed. For example, a broiler producer could have five cycles of 10,000 broilers in the barns in one year. In this case, report the total number of broilers for the year (10,000 broilers X 5 cycles = 50,000).

Wages and salaries

Question 51

Dividends paid by a farm corporation to its owners are not farm operating expenses like wages and salaries. Dividends are paid after tax, while wages and salaries are deducted before tax.

Question 52

Wages and salaries paid to family

The operator's family is defined as an operator, an operator's spouse or common-law partner and children residing in the same dwelling. Children are included regardless of age or marital status as long as they do not have their own spouse, common-law partner or child living in the same dwelling.

Include children studying away from the home whose main address is still the farm address.

Exclude:

  • operator’s parents
  • operator’s siblings
  • operator’s family members residing in a different dwelling on the farm land.

Farm operating revenue and expenses

Question 53

With the respondent’s consent, the following data (18 questions) will be obtained from the Canada Revenue Agency and shared with AAFC and your provincial ministry of agriculture:

  • Total gross farm revenue in 2017
  • The gross farm revenue in 2017 from the following:
    • sale of grains, oilseeds, pulse crops and forage seeds
    • sale of horticulture products
    • sale of cattle
    • sale of pigs
    • sale of poultry
    • sale of milk, cream and other dairy products
    • agriculture custom of contract work or machine rentals
    • all other farm revenue
    • total amount received for program payments.
  • Total farm operating expenses in 2017
  • The operating expenses in 2017 for the following:
    • fertilizer and lime
    • herbicides, insecticides, fungicides, etc.
    • seed and plants
    • feed, supplements and hay
    • fuel for machinery, trucks and automobiles
    • total interest paid on farm debt
    • land rentals

Note: In the case of sharing data with provincial agriculture ministries, the data shared will be limited to information pertaining to farm operations within the jurisdiction of the province.

Question 54

The Canada Revenue Agency has a requirement that Statistics Canada keep a record of the name of the person who gave consent to share the farm operation’s revenue and expenses data. As stated, your name will not be shared with Agriculture and Agri-Food Canada or your provincial agriculture agency.

Farm operating revenue

Question 55

Gross farm revenue represents the income received from the sale of agricultural commodities, as well as direct program payments made to support or subsidize the agriculture sector.

Please report the gross revenue before any deductions.

Question 56

g) All other farm revenue includes all farm revenue for this operation that does not fall into the other categories provided.

Include Patronage dividends - payments that a cooperative make to its members.

Agritourism - display gardens (flowers, herbs, etc.), food processing facilities, historical museums and displays, working farm/ranch, barn dances, corn mazes, corporate picnics, educational tours / workshops, entertainment/music, fairs, festivals, on-farm accommodations (guest ranch, picnic areas, restaurant, sugar shack, farm / ranch holidays), tours, retail sales, leisure/recreation (fishing, gardening, hiking, horseback riding, U-pick crops).

h) Total amount received for program payments represent payments from government agencies to farm operations in the form of rebates, subsidies and stabilization payments.

Farm operating expenses

Question 57

Operating expenses are the business costs, generating a cash outlay, incurred by farm operators for goods and services used in the production of agricultural commodities in the fiscal year.

Operating expenses are reported on the operation’s income statement and normally includes both direct and indirect production costs.

Include veterinary fees, medicine and breeding fees, e.g., artificial insemination.

Question 58

  1. Fertilizer and lime expenses include all costs associated with the purchase of fertilizer and lime including spreading, if it is part of the cost.
  2. Include all farm expenditures for pesticides (herbicides, insecticides, fungicides, etc.). If the application of pesticides is part of the cost, it is also included.
  3. Seed and plants expenses include the value of seed and seedlings purchased by farmers through nurseries, elevators, seed houses, seed dealers and other farmers. The value of home-grown seed and the value of seed bought for resale are excluded. Seed cleaning and treatment costs are included if they are part of the purchase cost.
  4. Feed, supplements and hay purchased by farmers, including hay and straw costs. The value of home-grown feed is excluded.
  5. Fuel for machinery, trucks and automobiles expenses include petroleum, diesel oil and lubricants used for all types of machinery and equipment from tractors and combines to generators and irrigation pumps. Only the farm business share of automobiles and trucks is included.
  6. Total interest paid on farm debt loans such as mortgages or credit from suppliers and private individuals.
  7. Land rentals includes all land rented for cash, from others including land rented from governments and other sources.

Financial information for sources other than this operation

Question 59

The operator's family is defined as an operator, an operator's spouse or common-law partner and children residing in the same dwelling. Children are included regardless of age or marital status as long as they do not have their own spouse, common-law partner or child living in the same dwelling.

Include children studying away from the home whose main address is still the farm address.

Exclude:

  • operator’s parents
  • operator’s siblings
  • operator’s family members residing in a different dwelling on the farm land.

a) Employment Income

Include the amount of money for the gross wages and salaries (before deductions) for all family members. If an operator is involved in a second independent farm operation, the gross wages or salaries earned from that second farm should be reported here as well.

b) Net self-employment income

Business income includes income from any activity done for profit, for example, income from a service business. Exclude employment income as business income.

Professional fees are fees received for goods or services provided, whether money, something the same as money (such as credit units that have a notional monetary value), or something from bartering was received or will be received.

Fishing income includes income earned whether payable in cash, property or services from fishing for or catching shellfish, crustaceans or marine animals.

Fishing income does not include income earned from working as an employee in a fishing business.

f) Other examples of other income not from this operation include income from snow plowing or cutting weeds along a roadway.

Questions 60 and 61

The operator's family is defined as an operator, an operator's spouse or common-law partner and children residing in the same dwelling. Children are included regardless of age or marital status as long as they do not have their own spouse, common-law partner or child living in the same dwelling.

Include children studying away from the home whose main address is still the farm address.

Exclude:

  • operator’s parents
  • operator’s siblings
  • operator’s family members residing in a different dwelling on the farm land

On-farm innovation

Question 62

If this operation has innovated, but has not yet seen the results, mark the question as “yes”; the impact of the innovation is not relevant to this question.

Innovation means implementing a new or significantly improved product, practice or process on your farming operation. Innovations must be new to your operation but need not be new to the industry.

Product innovation involves new or significantly improved crops produced, varieties planted, cultivars created, livestock types, and livestock breeds raised.

Production process and practice innovations involve new or significantly improved processes and/or practices regarding soil management, fertilizer application, irrigation and water management, and livestock handling.

Business management practice innovations involve new or significantly improved approaches to meeting labour requirements, business ownership and/or partnerships, acquiring inputs, and adding processing activities.

Marketing practice innovation involves new or significantly improved approaches to marketing the farm’s production, such as marketing and/or production contracts, futures and/or options and direct marketing.

Questions 63 and 64

This question is not specific to an innovation that has already been implemented. Please reply whether or not this operation has implemented a new or significantly improved innovation.

Innovation means implementing a new or significantly improved product, practice or process on your farming operation.

Question 65

This question is not specific to an innovation that has already been implemented. Please reply whether or not this operation has implemented a new or significantly improved innovation.

Thank you for your participation.

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