Planting the seeds for a sustainable future - City of Kamloops

Intensity of ProductionFigure 10 shows the average revenue per hectare (of ALR land) generated by farms in several regional districts in the BCinterior.The TNRD is among the least intensively farmed areas.Increased revenue per hectare might be achieved withmore: irrigation; intensive use of fertilizers and other inputs; higher value crops;land clearing; andproduction of supply managed products orintensive livestock.$4,000$3,500$3,000$2,500$2,000$1,500$1,000$500$-$128 $347 $1,585 $1,935 $416 $1,035 $3,703 $60Farm size, in terms of revenue generated, is extremelyvariable. The vast majority of the economic activityoccurs on the large farms. The 26 largest farms (10.5%of the 248 farms) generate at least 68% of the area’sgross farm receipts. The 123 smallest farms (49.6%),with sales of less than $10,000 per year, cumulativelygenerate less than 6.7% of the area’s gross farm receipts.Figure 10 – Intensity of land use based on gross receipts per hectare of land in the ALR.On Farm CapitalThe total market value of farm capital increased by 22% between 2006 and 2011. The average increase in the value of farmcapital was $376,794 over 5 years or $75,359 per year. This is important for a couple of reasons:There is an old axiom that says, "farmers live poor, die rich". Income from operations has been negative over the past twocensus periods. The average is a net operating loss of $1,162 per year. If the increase in farm capital is included, the averagebecomes a gain of $74,167 per year. Farmers have been able to use, and have used, these gains in capital values to borrowmoney for operations, effectively allowing them to continue to operate at a loss.It essentially creates a succession issue. There is not enough operating cash flow in the farm to pay long-term debt. Newfarmers therefore must buy in with very high levels of equity or have non-farm income to pay the mortgage.CITY OF KAMLOOPS 35