Agriculture Value Added Account

Detailed information for 2001

The agriculture value added account is designed to provide an annual measure of the value of income generated from the production of agricultural goods and services. The numbers are used to assess the state of the agricultural industry and to form the basis of various policy options.

Data release - June 20, 2002; February 10, 2004 (revised data)

• Description
• Data sources and methodology
• Data accuracy

Description

The agriculture value added account is designed to provide an annual measure of the value of income generated from the production of agricultural goods and services. Net value added represents the sum of the economic returns to all the providers of factors of production: farm employees, non-operator landlords, lenders and farm operators of agricultural businesses.

An important component of this account is the total value of production, which represents the value of the farm sector's gross output occurring within the calendar year. The total value of production is equal to the farm cash receipts plus the following elements: sales of agricultural products to other farms (farm-to-farm sales), custom work receipts, government rebates, farmland rent paid to farm operators, income-in-kind and value of inventory change. The inclusion of the value of change in producer-owned inventories makes it possible to value agricultural economic production during the year the agricultural goods were produced, regardless of when it was sold.

This account only relates to the farm business and hence excludes any income that farm operators or their families may receive from non-farm related sources (wages and salaries, investment income, etc.). It pertains to the production and marketing of agricultural commodities but also includes farm-related income such as custom harvesting and feeding, as well as forestry sales. Income from custom work is included only if earned with equipment purchased and used primarily in the farm's production activities. Forestry sales are included if harvested from a farm woodlot. Revenue or expenses related to the sale or purchase of farm capital (real estate, machinery and equipment) are not included. The account excludes also income earned from fish farming.

The format of the agriculture value added account is designed to display sources and allocation of value of production. The sources of value of production fall into four major categories: sales of agricultural products, sales of secondary production, other sources, and own-account production uses. The value of production is allocated into four major categories: expenses on inputs, business taxes, depreciation; and net value added. The net value added is then distributed to the various factors of production, including wages to non-family members; rent to non-operators landlords; interest to lenders of capital and returns to incorporated and unincorporated agricultural businesses.

The agriculture value added account is of interest to farmers and their organizations, governments, financial institutions, the agri-food industry and the public. The numbers are used to assess the state of the agricultural industry and to form the basis of various policy options.

Reference period: Calendar year

Collection period: During the three-week period prior to release.

Subjects

• Agriculture and food (formerly Agriculture)
• Farm financial statistics

Data sources and methodology

Target population

All Canadian agricultural operations as defined by the Census of Agriculture.

Instrument design

This methodology does not apply.

Sampling

This methodology does not apply.

Data sources

Data collection for this reference period: Late May 2002 to mid-June 2002

Data are extracted from administrative files and derived from other Statistics Canada surveys and/or other sources.

Sales of agricultural products to other farms include the sales of livestock, poultry, feed and seed to other farms. They are estimated using data from the derived survey Net Farm Income (survey ID 3473) and the Taxation Data Program (survey ID 3447).

Sales of agricultural products to other sectors include the sales to farms outside the province of production and the sales to other (non-farm) sectors. They are estimated using data from the derived survey Net Farm Income (survey ID 3473).

Sales of secondary production correspond to the sales of forest products (wood harvested from farm woodlots). They are obtained from the derived survey Net Farm Income.

Custom work receipts are obtained from the Taxation Data Program.

Program payments and Government rebates are obtained, from the derived survey Net Farm Income. The agencies responsible for the disbursement of payments under the various programs provide data on a monthly, quarterly and, in some cases, an annual basis. Only payments or rebates tied to agriculture production and paid directly from government to farmers are included in these derived surveys.

Farm land rent represents total rental income to operators for the rental of agriculture land and buildings. (Rental income to non-operators is excluded.) Farm land rent estimates are calculated using data from the derived survey Net Farm Income and The Farm Financial Survey (survey ID 3450).

Income-in-kind and Value of inventory change estimates are obtained from the derived survey Net Farm Income (survey ID 3473).

Expenses on inputs from other farms are derived by adding sales of agricultural products to other farms to farmland rent, both estimates found in the Agriculture Value Added Account.

Expenses on inputs from other sectors are estimated using data from the derived survey Net Farm Income.

Business taxes correspond to the property taxes expenses and are obtained from the derived survey Net Farm Income.

Depreciation estimates are obtained from the derived survey Net Farm Income.

Error detection

Macro editing is used. Editing is done at the provincial level. The method most often used is comparison with the previous year to detect substantial differences.

Imputation

This methodology does not apply.

Estimation

A full description on estimation is provided in the attached document.

• Additional documentation

Quality evaluation

The quality of net value added estimates and its components (sales of agricultural products, sales of secondary production, other sources of income, own-account production uses, expenses on inputs, business taxes and depreciation) is evaluated by checking the consistency of these data with other sources or previous occasions. An interpretative analysis is also conducted. Much of the data that goes into the calculation of net value added comes from the derived survey Net Farm Income (survey ID 3473), which is based on administrative programs. Much of the administrative data are already audited by the source organizations. Both the input data and net farm income estimates, which are prepared and/or derived, are closely scrutinized by our provincial counterparts and personnel in Agriculture and Agri-Food Canada through the "work in progress agreements". Anomalies that are found by these experts are thoroughly investigated prior to release.

Disclosure control

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. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

Revisions and seasonal adjustment

Data are published twice each year, in January and June. In June, data for the previous two calendar years are subject to revision. In January, data for three calendar years are released (e.g. in January 2003, revised data for 2001, 2000 and 1999 were available). Every five years a historical revision is done based on the results of the Census of Agriculture. The results of the latest intercensal revision, based on the 1996 Census of Agriculture apply to the period 1986 to 1998.

Data accuracy

No direct measures of the margin of error in the estimates can be calculated. The quality of the estimates can be inferred from analysis of revisions and from a subjective assessment of the data sources and methodology used in the preparation of the estimates.

The agriculture value added account is derived mainly from the derived survey Net Farm Income (survey ID 3473), which stem from a compilation of data from various surveys and administrative sources. The quality of the surveys and administrative data used in the Net Farm Income are considered to be good.

It is important to note that these data are subject to error. Administrative data may contain non-sampling error such as keying mistakes, while survey data may carry other non-sampling and sampling errors.