Canadian Farm and Nonfarm Family Incomes

Abstract

Analysis of level and distribution of economic well-being in North American agriculture is, without doubt, underdeveloped and fraught with ambiguity. Bawden refers to this situation as the neglected human factor (p. 879). It stems from censuses of agriculture that are typically enterprise-oriented, problems of monitoring selfemployment incomes, incomplete income measurement, and inadequate information on increasing importance of off-farm work in family income equation. In Canada, paucity of quantitative studies on subject is highly visible. Examples of few and far between include Fitzpatrick's regional analysis of family income based on a 1958 survey; a Federal Task Force on Agriculture evaluation of low income problem using limited data on sales and capital value; Gellner and Davey's study of incomes using aggregate tax data; McClutchy and Campbell's estimates of farm family real income, using questionable 1972 Agriculture Enumerative Survey; and Kulshreshtha's 1967 measurement of farm:nonfarm incomes in historical perspective. Most of these studies are comparable in neither methodology nor empirical coverage. Absence of information on returns to off-farm work is particularly conspicuous. With exception of Kulshreshtha's work, little attempt has been made to evaluate alternative farm:nonfarm income measures, or extent to which their viability depends on context in which they are being used. These shortcomings prompted a complete linkage of Canada's 1971 Censuses of Agriculture and Population, resulting in a unique data base with a wealth of income data. Some 365,000 enterprise questionnaires (with 199 questions) have been computer matched with independently enumerated Census of Population questionnaires for respective households. One-third of latter have been enumerated on a detailed sample basis. They contain approximately sixteen detailed income and employment-related questions and cover all members of census household. The linkage was designed and performed under direction of author. For details see Shaw (1971, 1979a) and Freeman. Income questions on 1971 Census of Population pertain to 1970. Total family cash income is sum of all income earned by family members from wages and salaries, net selfemployment, nonfarm self-employment, transfer payments, interest, rent, and other. This linkage commences a new decennial series with advantage that income coverage for and nonfarm families will stem from same census methodology and will pertain to same time period. We draw on this improved source (a) to place disparities in farm:urban incomes in Canada in clearer perspective, and (b) to single out incredible impact that off-farm work is having on reducing disparities.