Debt levels remained steady between 1990 and 1993 due to a combination of extremely low inflation and a period of recession. The current situation is preferable to what occurred during the 1970s and 1980s. High inflation during these two decades caused levels of farm debt to quintuple. This led to an important period of rationalization within the industry. Primary agriculture is a capital intensive industry.
Farmers finance their debt in a variety of ways.
Due to the capital intensive nature of the industry, and the relatively high level of debt farmers carry, even a small drop in interest rates can result in substantial savings. Although the debt level of farmers remains high, the number of bankruptcies has decreased over the last 15 years. The number of registered farm bankruptcies rose slightly to 275 in 1996. Prices also vary within a province with farm land closest to urban centres delivering a higher market price. Farming Costs Costs vary from sector to sector in the primary agricultural industry and between farmers due to differing productivity levels.