It has become a fall ritual for the alfalfa dehydration industry to go hat-in-hand to Ottawa asking for federal government aid.
The annual request is almost as predictable as the answer, which has been a resounding “no.”
The industry hasn’t received a federal bailout since the 1980s. But Dale Pulkinen, executive director of the Saskatchewan Dehydrators Association, is confident that’s about to change.
Pelleting plants have been building a case for aid since the Asian financial crisis of 1997 plunged the industry into a downward spiral, forcing key export destinations to cut back on their purchases.
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From that point forward it has been one disaster after another, said Pulkinen, with the key culprits being soaring energy costs and increased competition from subsidized European product.
Each year the carnage mounts. The industry has lost more than half of its processing plants over the past decade, falling from 15 facilities in the late 1990s to six plants in 2004.
The handful of remaining plants incurred losses of $5 million during the 2002-03 crop year, and will likely come close to matching that total in the year that ended July 31, 2004, said Pulkinen.
In efforts to remain viable, the Canadian Dehydrators’ Association is seeking a one-time payment from Ottawa amounting to millions of dollars.
A similar pitch has been delivered to politicians and bureaucrats since 2000, but this time there will be a different result, said Pulkinen.
“We’ve had our challenges before with the previous minister of agriculture. Certainly we hope the current minister will be a little more responsive.”
He also thinks the sector could have a strong ally in Ralph Goodale, Saskatchewan’s lone Liberal MP who happens to be the cabinet minister in charge of the government’s purse strings.
“Certainly the federal government found money to deal with the BSE situation, so I’m hoping they would look at it from a similar perspective,” said Pulkinen.
University of Saskatchewan agricultural economics professor Hartley Furtan thinks the dehy industry may be grasping at straws by comparing its plight to the BSE crisis.
“I think that’s a stretch to say, ‘they did it for them, therefore they’re going to do if for me.’ “
Alfalfa dehy processors should keep in mind that prime minister Paul Martin’s BSE aid package, which came in the form of the $930 million program, was announced a few months before the 2004 federal election.
“It was a big industry that was in trouble in an area he was trying to get votes in,” said Furtan.
He said it’s a mistake to assume politically motivated support for cattle ranchers indicates there is a different climate in Ottawa about providing aid to other agricultural sectors.
“To draw any conclusion that this implies all western cases will be better heard than they were under (former prime minister Jean) Chrétien, I don’t think is necessarily correct,” said Furtan.
Pulkinen said something has to be done to ensure the continued existence of an industry that lost 20 percent of its share of the Japanese market to European exporters, who are subsidized about $100 per tonne.
Shipments from Canadian pelleting plants have fallen to 216,658 tonnes in 2003 from 700,000 tonnes in 1999, representing a $59 million decline in trade revenue. That was partially due to drought, but there were other factors at work as well.
“(Exports) are directly impacted by unfair trade subsidies and hopefully the government will listen at this point in time that it is a situation that needs rectifying,” said Pulkinen.
