For many prairie farmers, 2002 will go down as one of the worst
production years in Western Canada. In many areas, crops and pastures
have been devastated by drought, grasshoppers, frost and untimely
rains. Earlier this year, Agriculture Canada predicted farm incomes
will decline across the Prairies, falling 19 percent in Manitoba, 47
percent in Saskatchewan and 22 percent in Alberta.
In the first instalment of a three-part series, special reports editor
Brian Cross visits a Saskatchewan farmer and discusses some of the
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
government programs intended to help the province’s farmers through
difficult times. Parts 2 and 3, to appear in the Sept. 26 and Oct. 3
editions of The Western Producer, will gauge farmers’ attitudes in
Alberta and Manitoba and review government programs in those provinces.
NEILBURG, Sask. – Like many prairie producers, Kim Putnam is
anticipating a disappointing harvest in 2002.
In an average year, the Neilburg, Sask., farmer would combine about
2,600 acres of cereals, pulses and oilseeds on his farm in northwestern
Saskatchewan.
This fall, Putnam will combine fewer than half of the 2,300 acres he
seeded.
The rest, approximately 1,600 acres, is not worth taking off. Some
crops were cut for cattle feed earlier in the summer. Others will be
left standing this winter, in hopes that they’ll trap snow and add some
desperately needed moisture for next year.
“I’ve never seen anything like it,” said Putnam, whose farm has
received less than 50 millimetres of rain since the spring.
“And my father, who took off 50 crops, says he’s never seen anything
like this, either.
“It’s hard to be enthusiastic when you’re going up and down the field
and you see a little trickle about the size of your finger going into
the hopper. It’s frustrating.”
This year’s disastrous growing season will present its share of
challenges for Putnam.
Plans for an addition to the family home have been set aside and any
thought of upgrading the farm machinery is unlikely.
In a year like this, there are more immediate financial concerns, such
as paying for seed, fertilizer, fuel and chemicals.
With the majority of Putnam’s crops expected to produce less than 10
bushels per acre this year, the importance of effective safety net
programs becomes obvious.
As usual, Putnam took out crop insurance this spring, which will help
pay the bills and allow him to put in a crop next spring.
But he concedes that an enhanced crop insurance program is needed to
keep more farmers on the land and to encourage a new generation of
producers.
“I wouldn’t be here if I didn’t carry crop insurance,” he said.
“As far as any other government programs go, I know we don’t have the
pocketbook that the Americans or the Europeans have, so I don’t really
expect anything.
“I use NISA (Net Income Stabilization Accounts), there’s no doubt about
it. The tough part about NISA is being able to trigger it.”
Of little help
Putnam is concerned about the attitude provincial and federal
governments are taking toward agriculture.
Existing safety net programs are enough to pull his operation through
difficult years, but for others, including livestock producers and
grain farmers who carry large debt loads, the existing mechanisms offer
little solace, he said.
“I operate my farm like I’m not going to get subsidized by the
government because I honestly don’t think it’s going to happen, and if
it does happen, it’s going to be such a minimal amount that it isn’t
really going to matter.
“I still don’t think we’re as hard hit as the cattlemen,” he said.
“They’ve been scrounging to find grass all summer long and if they did
have grass, they were scrounging for water.”
Putnam would like to see improved safety net programs that encourage
young farmers and offer more breathing room for existing producers.
Improving crop insurance would be a major step toward achieving that
goal.
Putnam said the province should start by devising enhanced insurance
programs that offer 95 or 100 percent coverage for grain farmers and
expanded options for cattle producers.
“I’d like to have better coverage and it sounds like the provincial
government is going to do something about that.
“Ninety-five percent coverage would be getting better. I’d even like to
see 100 percent coverage but then again, the premiums would have to
reflect that.”
Terry Hildebrandt, president of the Agricultural Producers Association
of Saskatchewan, said farmers across the province are expressing
similar opinions.
With the termination of the Canadian Farm Income Program, the need for
richer insurance options will become even more apparent.
Hildebrandt said there is general agreement among farm organizations
and government that an effective crop insurance program is necessary to
carry the industry through difficult times.
Federal agriculture minister Lyle Vanclief and Saskatchewan agriculture
minister Clay Serby have both indicated that crop insurance programs
and NISA will be the two pillars of Canada’s safety net package.
Hildebrandt agrees these programs could provide adequate protection,
but only if they are improved.
APAS and other farm groups have been lobbying for improvements to
Saskatchewan’s crop insurance and during the past two years, new
coverage options have been introduced, including the forage rainfall
program and the annual crop rainfall program.
But other changes, including the elimination of spot loss hail coverage
and the termination of the variable pricing option, have taken hundreds
of thousands of dollars out of farmers pockets, Hildebrandt said.
“Variable rate pricing in the drought areas, with the prices we have
now, would have amounted to $30, $40, $50 an acre,” he said.
APAS and the Canadian Federation of Agriculture have also voiced
concerns about the need to improve trigger mechanisms for NISA.
Last month, Vanclief announced details of a $600 million federal bridge
funding package to be distributed through NISA. Of that money,
Saskatchewan farmers were expected to receive about $174 million but
critics say much of that will be inaccessible because the calculations
used to trigger those funds are too restrictive.
“Because of the low grain prices that we’ve been facing for years, some
people in the drought areas probably won’t be able to trigger these
funds … so I’m not so sure it’s addressing the negative impact that
this drought has caused Saskatchewan,” Hildebrandt said.
CFA president Bob Friesen also suggested NISA triggers posed an
unnecessary obstacle to farmers who need drought assistance immediately.
“This money will not help Canadian farmers overcome the terrible damage
that is being done right now,” Friesen said.
“The government must expand flexibility in triggering NISA funds in
order to ensure that all farmers in need have immediate access to the
money.”
Discussions involving the provinces, the federal government and members
of the national safety net advisory committee are continuing to
determine whether new NISA triggers should be introduced for next year.
Those discussions will also include a call for a larger federal
contribution to Saskatchewan crop insurance, said Hildebrandt.
“In Saskatchewan, our main need is for an adequate crop insurance
program, including pasture and forages,” he said.
“You have to have a safety net program that you can take to the bank if
you’re going to get young producers or any new producers into this
business.
“Banks are not in the business of lending money to foreclose and if you
go there without a proper safety net and with such thin margins, you
only need one year like this and you’re done. No banks are even looking
at you.
“Producers are prepared to pay their share of the premiums for an
adequate program. We’re sick and tired of running back for these ad hoc
programs and transitions.”
