EDMONTON – The Alberta government will spend $17 million to shield alfalfa processors and irrigation farmers from the high cost of natural gas during their busy summer season.
The money is an extension of the winter natural gas rebate other farmers, businesses and homeowners received from January to April.
“The rebate didn’t assist them,” said Alberta agriculture minister Shirley McClellan of the irrigators and alfalfa processors.
The natural gas rebate paid $6 per gigajoule to farmers to help offset the price of gas during the coldest months.
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Alberta’s new deputy minister of agriculture, Brian Manning, said program details will be released in about a week. Because of a change in the price of natural gas, the amount will be different but the percentage will be the same, he said.
Earl Wilson, general manager of the Eastern Irrigation District in Brooks, said irrigators were hit twice by rising natural gas prices.
The government allowed Atco Gas to equalize the high price of gas over the entire year. Irrigators use most of their gas during the summer when it is usually less expensive.
“Summer users really got penalized,” he said.
Wilson said when they raised the inequity with premier Ralph Klein this year, he said it would be fixed.
There are 8,500 irrigators in Alberta. About 6,800 use some form of power to run their irrigation systems, split about evenly between natural gas and electricity.
Wilson said it costs about $40 per acre to irrigate. The natural gas rebate program will bring the cost in line with last year’s prices.
Dale Davidson, acting executive director of the Canadian Dehydrators Association, said the rebate will make the difference between a profit and loss for some Alberta plants.
There are about 21 alfalfa processing plants in Canada, half of them in Alberta.
It costs about $48 a tonne to process alfalfa. A $3 per gigajoule rebate would mean $18 per tonne savings, he said.
“That’s pretty significant,” said Davidson of Tisdale, Sask.
It will also mean Alberta alfalfa processors have a price advantage over the country’s other processors, he said. It costs Saskatchewan plants an additional $12 per tonne freight to get alfalfa to the West Coast than Alberta farmers, he said.
Davidson said he doesn’t begrudge Alberta processors their gas rebate.
“Good for Alberta if they can get that. Hopefully it will put pressure on the other provinces,” he said.
