At the core of Wayne Easter’s report on the decades-long decline in farm incomes is a call for governments to reassess their presumptions about why farm incomes are low and how it can be remedied.
For decades, he says, governments have bought the economists’ argument that farmer inefficiency and farm size are the main causes of anemic farm income and that greater efficiency, better management decisions and increased trade are the answers, backed up by government support when the cycle is down.
But while farmers have become one of the most efficient links in the food industry chain and trade more than doubled in the past 15 years, average farm income from the market has declined from a peak of $21,000 in the 1970s to a negative $7,000 in the past four years.
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“The income crisis for family farms is not short term or cyclical,” said his report, which was presented to federal and provincial agriculture ministers in Alberta July 7.
“It is long term and systemic. It is global … Confronting the situation requires that everyone – farmers through to governments and citizens – recognize that the crisis is more deeply rooted than a frost, a drought, the limitation of certain government programs or even global subsidy wars or the discovery of BSE.”
The root cause, says the former president of the National Farmers Union and four-term Liberal MP, is that agri-food corporations have market power and take the cream of the industry’s multibillion-dollar revenues. Farmers have weak market power and receive the dregs.
“We do have to collectively find a way to balance that market power internationally so that we in effect are operating not only under free trade but fair trade on the most essential of commodities, food,” Easter wrote in a cover letter to ministers.
“What policy can be more important than a nation’s food security? The question that we in government must ask is this: what actions do we have to take to ensure that farmers receive a fair return from the marketplace for their investment and labour?”
Power to farmers
His core answer was that Canada’s agriculture minister must try to organize an international political effort to control corporate market influence and increase farmer power and market returns.
But Easter, parliamentary secretary to agriculture minister Andy Mitchell, also implored ministers to tilt their portfolios toward producer concerns rather than the interests of the profitable agri-business sector.
As well, he proposed a number of policy changes that would increase government intervention to try to help farmers:
- Government investment in new farmer-controlled packing plants.
- More government support for new generation farmer co-ops.
- Government funding support for community-based land banks and land trusts that could help new farmers acquire cheap land and small farmers expand.
- Creation of a farmer-controlled food trading and export company based on the controversial and failed crown corporation Canagrex in the early 1980s.
- Income Tax Act changes that would allow farmers to shelter from tax some income in good years to be used in lean years.
- Elimination of succession and estate taxes on farms.
- Changes to the Competition Act that would make the Competition Bureau a more powerful and toothy watchdog over the impact of agri-business concentration on primary producers.
- Adherence to a government principle that “public good” policies such as environmental plans, on-farm food safety and carbon sinks policies to control greenhouse gas emissions should be paid for by taxpayers. There is also the suggestion of user-fee rollbacks.
- Regulatory reform to make the Pest Management Regulatory Agency more efficient and farmer friendly.
Easter also said governments have an obligation to continue funding support programs for farmers, but with government bills expanding and market returns falling, it is not a long-term remedy.
Last year, federal and provincial governments say they spent a record $4.9 billion on program payments for farmers while realized net farm income was less than $2 billion.
“It is a legitimate role of governments to do so but Canadian citizens are providing assistance to one vulnerable sector in an otherwise profitable food chain with no great expectation that things will improve,” he wrote.
