Lynn Jacobson allowed himself a grim chuckle when asked how U.S. farm bills affect him.
“It definitely has an effect,” said the producer from Enchant, Alta.
Jacobson, a mixed farmer, says that although his area is on the doorstep of Alberta’s feedlot alley, he and many of his neighbours grow soft white wheat rather than barley.
Yields are about the same and the wheat price has been higher for the past few years.
So instead of growing a cereal grain to feed to a local livestock industry, he’s producing one for export.
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Another factor in his decision is that cheap U.S. corn has often poured into the area, undercutting local barley prices and reducing local farmers’ interest in growing the crop.
It’s just one example of the weird economics produced by U.S. farm bills, which subsidize production of crops such as corn.
Many fear it’s a form of economics that isn’t soon likely to disappear.
“We’re trying to get away from our subsidies, and they aren’t,” Jacobson said.
“They’ve hurt us bad in the past and it looks like they’re never going to give up.”
Jacobson was interviewed a few days after the U.S. House of Representatives passed its version of the new farm bill, a $286 billion US five-year plan that would continue all of the major crop production subsidies that outrage farmers in Canada and elsewhere.
There had been hopes for major reforms to end subsidies deemed to distort prices.
The Senate has yet to produce its version of the farm bill and some believe it will take a different path, forcing the two houses to compromise. Also, U.S. president George Bush has threatened to veto any bill that looks like the House version, but the threat remains that the new farm bill could be a lot like its predecessors.
Canadian farm groups are disappointed and annoyed.
“It’s a continuation of the same-old, same-old,” said Richard Phillips, executive director of the Grain Growers of Canada.
“We were hoping to see meaningful commitment in the grains and oilseeds sector that they were going to take real steps to reduce things.”
Bob Friesen, president of the Canadian Federation of Agriculture, was similarly outraged.
“It continues to debilitate our farmers’ ability to be competitive,” he said a few days before the bill passed. “The U.S. continues to outcompete Canada on farm policy.”
James Bezan, Manitoba Conservative MP and chair of the House of Commons agriculture committee, said efforts to end American price-distorting subsidies seem to be showing few results.
“We’re quite concerned with what’s going on in Congress,” he said.
“It could be very detrimental.”
If the present House bill became law, all the major crop production subsidies would be maintained, although with reduced spending caps.
The good news for Canadian farmers who believe U.S. farm bills stimulate surpluses that depress market prices is that for the first time in decades, there’s a real chance this farm bill will be beaten down by widespread opposition.
Hopes for ending the production-distorting subsidies “haven’t yet been dashed,” said Kevin Brosch, a Washington, D.C., farm bill expert who helped design earlier farm bills.
“This is only the House action. It’s really too soon to say (hope) has been totally dashed, but this is going to be a big fight.”
One reason for the changed perception of the present farm bill politics is that the American public is paying attention, a rare event. That’s because the U.S. government has been running huge budget deficits, and the public is reading stories about multimillionaire farmers receiving government subsidies.
“The press on this has been murderous for (those who want to maintain production subsidies),” Brosch said.
Regardless of the final form of the bill, there may be a small silver lining for Canadian farmers: the amount of money that the Congressional Budget Office is allowing to be set aside for production subsidies for the next five years has been cut by more than 40 percent because of high grain prices.
And in an era of record budget deficits, members of Congress aren’t likely to find an easy way to increase funding.
“It’s the only thing that’s keeping them checked and balanced. Otherwise, they might try to outspend the European Union,” Bezan said.
“I’m glad they’re in a situation where they can’t meet every whim, because they have farm group after farm group coming through their doors demanding more money.”
Friesen said the politics that surround the present farm bill show that Canadian farmers shouldn’t expect U.S. subsidies to end soon.
“The farm bill and the (World Trade Organization) negotiations point to the fact that the U.S. really doesn’t want to change their practices at all.”
Meanwhile, on his Alberta farm, Jacobson said the Canadian government needs to stop weakening farm supports, relying on U.S. promises to reform their policies.
“We need to design our own programs so that we can survive, too.”
