OTTAWA – The federal government has announced an end to the Crow Benefit subsidy, a sharp reduction in the size of Agriculture Canada and a 30 percent cut in farmer safety net spending.
Seven research stations will be closed, including Regina, Vegreville, Alta. and Prince George, B.C., in the West, and dairy farmers will lose 30 percent of their $217 million dairy subsidy over three years.
In a tough, deficit-fighting budget Feb. 27, finance minister Paul Martin made agriculture and farm programs a prime target for cuts.
Over three years, the Agriculture Canada budget will fall 21 percent, $445 million, to $1.628 billion in 1997-98.
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Staff positions axed
Agriculture Canada staff positions will fall by almost 20 percent over the next three years to 9,437. An estimated 2,069 positions are slated to be axed, including more than 160 who have been working on the Net Income Stabilization Account program in Winnipeg.
However, the single biggest announcement for agriculture was an end to the $560 million, 98-year-old Crow Benefit subsidy on rail transportation for grains headed for export points.
Effective July 31, the Crow Benefit subsidy will end. Ottawa will make a one-time, $1.6 billion payment to farmers who own prairie farmland and who have benefited from the subsidy.
Federal officials said Monday Ottawa hopes to make its first payments by next January.
Negotiations with farm groups and provinces that were expecting much more, will be tough, a senior Agriculture Canada official conceded.
“But there will be no more money,” he said. “This is all we could get and it is all we are going to get. We can be a bit flexible on some details of the payout but not on the size.”
An additional $300 million will be spent on “transition” programs over six years beginning next year and the railways will be given more freedom to abandon low-volume, high-cost lines.
Meanwhile, Martin said that by 1997-98, Ottawa will cut farm safety net funding to $600 million, compared to the $850 million promised by agriculture minister Ralph Goodale last year.
The cuts in the departmental bureaucracy will hit the Ottawa headquarters the hardest.
Of 2,069 positions cut over three years, 559 will happen in Ottawa.
The biggest cuts will be in safety net, research and inspection services.
The budget also calls for farmers to pay higher fee-for-service charges to government in areas like inspection and grading.
