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Abstract

Farm lobby groups in Canada have consistently argued that there is a farm income crisis. However, the average net worth of Canadian farm families has been two to three times the average net worth of all families. If farm incomes are so persistently low, how and why do farmers continue to farm and purchase farmland at such high prices? A discounted earning model was employed to estimate farmland value in Canada. The overall conclusion is that there is no strong evidence that Canadian farmland is overpriced, as would be expected from the low levels of net farm income.

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