EVEN IF you lack the mandatory university degrees, it is comforting to think of what it would be like to have a career in academia or think tanks where complex problems become simple.
Take a recent Fraser Institute report that complained about the distorting and regressive effect that price-fixing, production controlling, import-restricting supply management has on Quebec agriculture.
It is keeping it from becoming modern and competitive and profitable.
Shortly after that report was published, farm income projections for Quebec this year showed the agriculture sector to be the most lucrative in the country and the least dependent on taxpayer subsidies.
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Worrisome drop in grain prices
Prices had been softening for most of the previous month, but heading into the Labour Day long weekend, the price drops were startling.
As usual, with its reliance on supply-managed production and the richest, most comprehensive farm programs in the country, Quebec farmers will fare the best this year.
The Agriculture Canada analysis projected that despite a 13 percent drop in program payments, realized net farm income for Quebec will increase eight percent to $676 million. On an average farm, that represents net operating income of $61,112 before depreciation.
In Ontario, large public support payments will not give agriculture an income much above zero. Still, supply management offends the very principles of free trade that will allow farmers (well, at least some of them) to survive and prosper.
Then there was the recent paper prepared for the Canada West Foundation by University of Manitoba economics department PhD Greg Mason.
His essential argument is that farm policy is a jumble of social welfare, market development and business support programs that often conflict and certainly do not offer a coherent view about where government wants policy to lead or push the industry.
There is no argument about the wisdom of that conclusion of policy confusion.
But when it came to prescriptions, Mason was able to look out of his office window and see a simplicity and clarity that most people mired in the industry or its policy support structure do not see.
“It is tempting to think that the varied and complex problems encountered by the farm sector in prairie Canada necessitate varied and complex policy,” Mason wrote. “However, the core of any agricultural policy must be a program to reinvigorate the farm as a self-sustaining business. The increasing patchwork of programs creates myriad cross-cutting incentives that obscure the stated intent of having the market drive the welfare of the farmers.”
Of course! (Picture farm policy wonks hitting forehead with palm of hand. Why didn’t we think of this?)
The answer is a supersized program that rewards farms that make money and eliminates the chronic losers. Get rid of import controls for the only sectors that chronically make money. Sustaining rural Canada will be someone else’s responsibility.
The answer is support for those who are replacing all the soon-to-be retirees to build bigger and more competitive farms.
The answer is generally to quit those damn subsidies and let modern business-oriented farmers become competitive and be willing to face a world in which many of their competitors receive more domestic support and have more clever and subtle import controls.
The future of a world-competitive agriculture is to be mean, lean and … vulnerable. Why did no one think of this before?
