WASHINGTON, D.C. – Canadian farmers and farm leaders are keeping an anxious eye on the U.S. farm bill debate this summer, recalling the bill’s impact in this country during the last 10 years.
The 1985 farm bill introduced the Export Enhancement Program, (EEP) an export subsidy that drove world grain prices down, escalated a trade war with Europe and cost Canadian farmers and taxpayers billions of dollars.
Agriculture minister Ralph Goodale has called it “the most market-distorting program on the face of the earth.”
Canadian farm leaders agree.
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“There is no question we have to know what is going on in the United States,” said Prairie Pools Inc. chair Ray Howe of Saskatchewan Wheat Pool. “The farm bill leads directly back to the kind of prices we get on our farm and the kind of markets the wheat board has.”
A new U.S. farm bill is drawn up every five years. It sets out funding and direction for American farm programs for that period.
This year, even as Congress is talking about sharp cuts to domestic subsidies for U.S. farmers sometime in the future, there is little American inclination to cut EEP spending. In fact, it could be extended to cover a wider range of goods.
“The EEP will dramatically affect the markets Canada is working in internationally,” said Canadian Federation of Agriculture pre-sident Jack Wilkinson. “We don’t have a say in what happens down here but it sure as hell affects us.”
Can’t afford to keep up
He said it may be doubly so this time because unlike 1985 and 1990, the Canadian government has declared that as a budget-cutting measure, it no longer can afford billion-dollar subsidies to Canadian farmers to help offset lower EEP-induced prices.
“If we had decent support programs in Canada, I guess you could live a bit easier with what the Americans do,” said the CFA president during a May visit to Washington. “I don’t see that happening and it is becoming Canadian farmers on their own against the U.S. treasury.”
Politicians and farm leaders agree that American political decisions during the next few months on the level of domestic farm subsidies, base prices and export subsidies will send strong signals about the prospects for Canada’s food export business to the end of the decade.
