The federal government’s bill for supporting agriculture during the next fiscal year will fall by one-third, heading toward its lowest point in close to two decades, according to spending estimates presented to Parliament last week.
In the year beginning April 1, 1997, Ottawa expects to spend a net $1.65 billion on Agriculture Canada programs, compared to $2.48 billion in the current year.
By the year 2000, the net cost is projected to fall another 17 percent to $1.37 billion.
Staff positions funded in the department will fall by close to 600 next year, from 10,057 to 9,481.
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In part, the sharp drop in spending reflects the end of the Crow Benefit buyout program and the winding down of other transition programs.
In part, it reflects a continued shift of grading, inspection and research responsibilities from the government to the private sector, as well as $160 million in expected cost-recovery revenue.
And in part, it is a reflection of the Liberals’ relentless drive to make the government less involved in the industry.
In the House of Commons when he tabled government-wide spending estimates, treasury board president Marcel MassŽ bragged that government spending as a share of the economy is the lowest in half a century.
Agriculture Canada’s part in that government shrinkage is evident in most of its programs.
Research spending will fall 13 percent in 1997-98 to $255 million. The private sector is expected to contribute tens of millions to fill some of the gap while the number of positions funded by Ottawa falls 12 percent to 2,314.
The cost of inspection and regulation will fall 10 percent next year to $221 million and a further 21 percent the following year to $175 million.
Agriculture minister Ralph Goodale used his introduction to the spending estimates document to argue that all this is creating a climate in which agriculture can thrive.
“As we head towards the 21st Century, the Canadian agriculture and agrifood sector should position itself among the leading four or five sectors in our national economy,” he wrote.
If it achieves that, it will be with less government support than has been the recent tradition.
The government noted private investment in the sector is growing.
During the past five years, foreign investment has risen 50 percent, capital investment in the food sector now exceeds $2 billion annually and “the rate of new investment by Canadian food and beverage firms compares favorably with that of their U.S. counterparts” – about 3.3 percent of the value of sales.
The department said the next year will see:
- Completion of the move to turn hog grading over to the industry.
- Creation of the Canadian Seed Institute to operate inspection services now run by the government.
- Introduction of full cost recovery in livestock and poultry grading.
Goodale also predicted development of a new long-term national dairy policy next year, although negotiations are stalled because of disputes between dairy farmer and processor representatives.
