An Economic Analysis of Profitability, Income Variability and Competitiveness of Farms under Different Size Categories in Ontario

Aerial View of Farmland

Despite the recognition of growing heterogeneity among farms in recent years, little is known about the range of variations in farm income and farm profitability across farms of different sizes in Ontario. Are there economies of scale or size that are consistently more profitable than others? What impact does diversification really have on farm profitability and income variability in Ontario? Does it vary across commodities and between small and large sized farms? While it is widely believed that BRM programs benefit all farmers, little is known about the effect of BRM program benefits on farm profitability, income variability and competitiveness of different sized farms in Ontario.

The main purpose of this research is to seek answers to these questions. We will measure variations in farm income and profitability across farms of different size categories and examine relative contributions of economies of scale, farm size and level of diversification to

farm profitability in Ontario. We will also investigate the range of BRM program benefits received by farms and how do these benefits affect farm profitability, income variability and global competitiveness of different sized farms in Ontario. Finally, the implications of the results for redesigning BRM programs will also be explored.

Project Leader: Rakhal Sarker

Economics of Farm Income and Farm Structure
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