No one anticipated this trade war. Canada’s business risk management programs were not designed to address it.

The federal government has stepped in to help other sectors, including dairy, deal with market losses caused by international trade agreements and the actions of foreign governments. Equivalent measures are required for Canadian grain farmers, who do not have access to employment insurance or other commonly available social safety nets when facing the economic fallout of unfair trade actions.

The prices set at U.S. commodity exchanges serve as key price benchmarks for world markets in which Canadian products must compete. Farmers in the U.S. receive a market facilitation payment (MFP) as compensation during this trade war. Payment rates and other details were announced in August. The acreage payments are generally in the range of $15 to $100 per acre for corn, soybean and wheat.

Questions have been raised about how a similar program could work for Canadian grain farmers. This proposal is modelled on the U.S. 2019 MFP and adjusted to ensure timely and proportional compensation to Canadian grain farmers for market loss based on the basket of crops grown in their region and their soil productivity.

Trade is a federal responsibility and the current trade wars are affecting commodities across Canada. The proposed program would be national in scope and 100 percent federally funded.

Payment rates for Canadian farmers are based on the 2019 U.S. MFP commodity rates for wheat, soybeans, corn, lentils, peas and other crops grown in Canada. The government of Canada would cover 85 percent of the 2019 U.S. MFP commodity payment rates in recognition that Canada did not initiate the trade war.

The losses for canola will be assumed equal to the losses in U.S. dollars per bushel on soybeans. Similarly, the losses for barley, a major feed grain in Canada, will be assumed equal to the losses in U.S. dollars per bushel for corn.

The U.S. MFP rates convert to payment rates in Canadian dollars of $2.32 per bushel on canola and soybeans, $2.71 per bu. on lentils, 52 cents per bu. on field peas and 47 cents per bu. on wheat. Production is calculated as the five-year average yield (bushels per acre) for eligible crops grown in each crop insurance “risk zone” in Canada.

The basket of crops determines the payment for a risk zone. For example, multiply the five-year average acres for each crop by the five-year average yield for each crop and then by the payment rate for each eligible crop. These are cumulated over the mix of crops in the risk area and divided by the total acres of those crops to determine the acreage payment.

Payments are further adjusted for soil class to account for productivity differences in each risk zone. For instance, in Saskatchewan if the payment is $40 per acre on an E soil, then the payment on a B soil would be more and on a G soil would be less.

Individual farm yields and individual management decisions do not affect program payments. Inputs and crop choice will continue to be made at the individual farm manager level without incorporating the program into decision-making. The program does not distort markets or influence cropping decisions.

Canadian dairy farmers are promised compensation over the next eight years for the anticipated hurt from trade negotiations and trade rule changes. Canadian steel and aluminum manufacturers also received government financing and direct support in response to U.S. tariffs on Canadian exports.

The Canadian grain industry is an export-oriented, trade-exposed sector. The principle of compensating for the demonstrated hurt from trade should equally apply to Canadian grain farmers who create jobs and economic growth across Canada.

Marketing freedom should not mean the state is free to expropriate farmers’ assets without compensation. Expropriation can be used when a highways department acquires property, with compensation by agreement or settled in the courts.

Bill C-18 confiscates farmers’ property by nationalizing the CWB building, rail cars, lake vessels, computers, software and the contingency fund without compensation. It fires the farmer elected directors and replace s them with five government appointees, who are under direct control of agriculture minister Gerry Ritz. I abhor this behaviour by the Harper government.

Marketing freedom does not mean the government is free to trample the democratic process. Andrew Coyne, in the Dec. 5 issue of Maclean’s,suggested that “Parliament is dying.”

Limitations on debates allow the Harper government to be a colossal bully, despite being elected by only 24.3 percent of eligible Canadian voters.

The Saskatchewan Party received 64 percent of the popular vote, a landslide victory. When 62 percent of farmers in the CWB’s plebiscite favoured keeping the single desk for wheat, the Harper government reckons it does not matter. Do we adhere to democratic principles in Canada or do we not?

Harper’s roots in the Reform party valued Parliament’s accountability to voters. His closure on debate, on enforced party-line voting and no plebiscite on the CWB is a strong denial of the principles on which his party was founded.

Farmers feel betrayed by ministers Ritz and Chuck Strahl, who both made campaign promises to conduct a producer vote on changes to the CWB.

The perpetuation of urban myths and untruths have been reinforced by Ritz, suggesting that farmers went to jail for exporting wheat to the U.S. without an export permit.

In one case, a farmer named Andrew Michael McMechan hauled wheat into the United States without an export permit, but the fines and incarceration applied were not due to the missing permit.

“It will be apparent, however, that the accused was not charged with a violation of s. 5 of the Regulations, but, rather, with other offences under the Customs Act, the Immigration Act, and the Criminal Code,” Manitoba Court of Appeal Justice Charles Huband wrote in a 1998 decision.

The Canadian canola market is not exemplary, as Ritz would have you believe. The processors’ crushing margin for a bushel of soybeans in the U.S. is normally 30 to 90 cents per bushel.

The margin in the Canadian canola crushing industry is frequently in the $2 to $4 per bu. range. Canola at $12 per bu. has been a good crop. With reasonable competition, one might have expected $13 or more.

The removal of the CWB single desk triggers reduced prices and immediate losses of more than $500 million to prairie farmers, communities and Canadians, according to eminent economists who examined actual CWB sales records.

The lower selling price for wheat benefits foreign consumers and enables oligopolies in the prairie grain handling and transportation sector to increase their margins. These oligopolies have numerous foreign shareholders who will benefit while Canadian farmers will lose.

The U.S. countervail case against Canada on wheat concluded that Canadian farmers received higher prices than U.S. farmers for durum for 59 months out of 60.

Using an anecdote from one farmer, Ritz states that the spot price in the U.S. on a selected day is above the CWB pooled price and this is deemed as evidence.

Anecdotes should not trump analysis. Canadians expect parliamentarians to make informed decisions.

Rosaasen is an agriculture professor at the University of Saskatchewan and a farmer.