A national farm safety net program that does not compensate grain farmers for damaging foreign subsidies will not do the job, the Grain Growers of Canada farm lobby told MPs last week.
GGC executive director Cam Dahl insisted in an appearance before the finance committee Oct. 7 that the agricultural policy framework, as it is currently designed, will not serve the sector well.
Foreign subsidies drive down prices and ironically, reduce eligibility under the APF’s business risk management programs.
“Canada’s principal safety net programs are based on historical revenues (and) because our grains and oilseeds producers receive world prices, these revenues have been falling as a direct result of rising foreign subsidies,” Dahl said in a brief to the committee.
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“This means that Canadian safety net spending will decline at a time when it is needed the most, when the negative impact of foreign subsidies on world markets is increasing.”
The finance committee is holding hearings on public views of appropriate measures for the next federal budget, expected February or March 2004. Since the Liberal leadership change will have happened by then, the hearings really are a chance for lobby groups to try to influence Paul Martin’s first budget as prime minister.
Dahl said the budget should fix a fundamental flaw in the APF design that excludes trade hurt from the compensation formula.
“The fundamental needs of grains and oilseed farmers will not be addressed until this is corrected,” said the GGC brief.
The group also urged the government to use World Trade Organization talks to negotiate freer trade rules and lower world subsidies.
Dahl said trade reform would allow the market to work better and reduce the need for government support.
The Canadian canola industry would benefit from an end to or a lowering of India’s 85 percent tariff on canola imports, said the GGC. As a more positive example, it noted that Canada sells more than $100 million worth of pulse crops to India, a market that “exploded” after 1997.
The group also argued that an end to the Canadian Wheat Board monopoly would give prairie grain farmers more income.
Grain Growers said that as one example, the sale of dried distillers grain from ethanol plants into the food or export markets would be a revenue source, supporting development of more value-added ethanol operations. A wheat board requirement that a tonne of distillers grain sold into the food market be offset by a tonne of wheat purchased from the board is a “disincentive for investment in ethanol production in Western Canada.”
