TORONTO – A report by federal and provincial bureaucrats on the
existing farm safety net system says the current patchwork system has
worked for some farmers but left others without adequate help.
The report was delivered Jan. 24 to a federal and provincial
agriculture ministers meeting. It was background to negotiations over a
new national farm policy.
“For many farmers in Canada, the suite of safety nets currently
available has provided some measure of stability in their incomes,”
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said the 173-page report. “However, there are gaps. Those who are in
more need of income support than income stabilization would be better
served with an alternative set of tools directed specifically at
meeting the requirements they have to improve their situations.”
The federal-provincial safety net working group noted that crop
producers facing years of declining income are poorly served by a
support program that offers coverage to a percentage of income.
It said support for prairie grain farmers relative to the value of
their crop is smaller than for many other commodities and even for
grain farmers in Eastern Canada.
It said supply management farmers benefit more from federal policy than
do grain farmers.
And it noted that despite the array of support programs, which often
duplicate coverage and provide payouts when market income is robust,
farmers consistently pressure for more support.
“These demands raise questions about the effectiveness of existing
programs,” said the report. “As well, when considered together, overall
objectives of safety net programs as perceived by governments and
farmers are not clear.”
The committee of senior bureaucrats suggested that rather than try to
improve the existing programs, a new set of programs with more precise
goals, links and expectations should be developed.
Federal agriculture minister Lyle Vanclief told a Jan. 24 news
conference that the report confirmed the obvious – existing programs
have not been effective for all farmers.
He said the Canadian Farm Income Program, based on coverage of a
percentage of declining income, has not been the best protection for
grain farmers.
“Seventy percent of zero gross margin is not a very big number,” he
said. “It’s zero.”
The report argues that farmers and economists hoping for strengthened
market prices because of growing population should abandon the hope.
Commodity prices have been falling for two centuries in real terms and
the decline will continue.
It also confirms that by propping up production in a world with limited
demand, rich American and European farm subsidies have depressed prices
and cost Canadian grain farmers at least $1 per bushel during the past
five years.
Yet the committee of officials insists that Canadian governments are
correct not to match the high EU and U.S. subsidies. The money would
simply become capitalized into land values or isolate farmers from
market realities.
“Attempting to match U.S.-EU subsidies is not an appropriate response,”
said the report. “Large subsidies don’t fundamentally alter the
adjustment problem that has to take place in the farm sector. It can
delay for a few years when that adjustment will take place but the
additional support will be overtaken by the fundamental changes that
will continue to result in lower prices.”
