CALGARY – The dehydrated hay industry wants assurances it will receive a fair share of a $300 million adjustment fund offered by government as agriculture makes the transition to a subsidy-free environment.
The Canadian Dehydrators Association wants the equivalent of four years worth of the Western Grain Transportation Act benefit.
CDA executive director Garry Benoit said figures from the Producer Payment Panel showed the railroads received $14.1 million in 1992-93 to move export forages to the West Coast.
The alfalfa processing industry is unique because it was the only product under the WGTA where the benefit applied to the processed sector, said Benoit. Taking away all subsidies jeopardizes the processors’ ability to continue as a value-added industry, he said.
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Their share of the adjustment fund could help relocate some plants to main rail lines, increase production, develop new products, stimulate market development or create terminal storage at the West Coast.
Benoit said the industry produced 742,000 tonnes of alfalfa pellets and cubes in the 1993-94 crop year and exported 640,000 tonnes. The majority of this country’s processors are in Alberta and Saskatchewan. Japan was the main buyer.
Higher shipping costs will raise the price of processed forage. Benoit is not sure if they can recover the additional costs from the marketplace, especially since some of Canada’s European competitors subsidize their forage industries by as much as $125 a tonne.
“The GATT deal hasn’t ended all the subsidy programs,”said Benoit.
“The feed complex is very complicated and interwoven. It’s not like one product competes with us.” Ingredients in the feed ration industry can include corn, wheat bran, vegetable or beet pulp.
“Whatever’s cheap gets used to ratchet down our price,” said Benoit.
