Agriculture Value Added Account

Detailed information for 2015

Status:

Active

Frequency:

Annual

Record number:

5030

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 - November 29, 2016

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
  • 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

No sampling is done for this statistical program.

Data sources

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 Net Farm Income series (record number 3473) and the Taxation Data Program (record 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 Net Farm Income series.

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

Custom work receipts are obtained from the Taxation Data Program.

Program payments and Government rebates are obtained, from the Net Farm Income series. 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 Net Farm Income series and the Farm Financial Survey (record number 3450).

Income in kind and Value of inventory change estimates are obtained from the Net Farm Income series.

Expenses on inputs from other farms are derived by adding sales of agricultural products to other farms to farmland rent. They are estimated using data from the Net Farm Income series and the Taxation Data Program.

Expenses on inputs from other sectors, are estimated using data from the Net Farm Income series.

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

Depreciation estimates are obtained from the Net Farm Income series.

Error detection

The value added components are verified for large year-to-year changes, analyzed for time series consistency, links to current economic events, issues arising from the source data, and for coherence with other sources.

In addition, the source data are subject to their own quality-control procedures during collection and processing stages. For instance, computerized checks identify processing errors at the data-capture stage and subsequent editing identifies, among other things, errors, inconsistencies and extreme values in the captured data. Top contributors at the provincial level are often further analysed.

The administrative data used in the series are assessed based on historical and current trends, subject matter expertise and information obtained through discussion with industry authorities. Much of the administrative data are already audited by the source organization. Any anomalies or inconsistencies detected are verified with the source, and, where necessary, adjustments are made to reconcile data with the conceptual framework of the Value added series.

Imputation

This methodology type does not apply to this statistical program.

Estimation

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

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, and previous occasions. An interpretative analysis is also conducted with links to current economic events and issues arising from the source data. Much of the data that goes into the calculation of net value added comes from the Net Farm Income series (record number 3473) and the Taxation Data Program (record number 3447) which are subject their own validation procedures.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects that 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 in November for the previous calendar year. At that time data for the previous two calendar years are subject to revision. 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 2011 Census of Agriculture apply to the period 2005 to 2011. The results of the latest intercensal revision, based on the 2011 Census of Agriculture, decreased net value added in 2010 by -4.2% at the Canada level.

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 theNet Farm Income series (record number 3473), which stem from a compilation of data from various surveys and administrative sources. The surveys and administrative data used in the Net Farm Income are considered to be of good quality.


In general, weaknesses in the source data are from either under coverage or from inappropriate concepts and definitions. The data used in the derivation of value added are quite varied in coverage, details, definitions and concepts and often these factors may not coincide with those required. They must be thoroughly examined and adjusted for consistency and coverage, using carefully designed estimating procedures.

Administrative data are generally compiled for an organization's own needs, and not for statistical purposes, however much of the data are already audited by the source organizations. The administrative agencies used are considered to be the best sources available, and data received from them is judged to be of very good quality, even in those circumstances where adjustments have been made to cohere with the conceptual frame work of the Value Added Account.

The processing procedures of surveys help minimize the occurrence of non-sampling errors such as errors introduced during editing, and response errors. But because they are based on a sample rather than the total population, they are subject to sampling errors.

An integral part of each Census of Agriculture is the implementation of new or enhanced methods, procedures and technologies that improve not only the collection, but also the processing, validation and dissemination of the data. As a result, the 2011 Census of Agriculture data are considered to be of very good quality, with data for the major commodities being of the highest quality. A response rate of 95.9% and an estimated 1.8% undercoverage rate of farms indicate the overall success of the 2011 Census of Agriculture.

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