Ag Canada report | More than one-quarter of agriculture GDP linked to government dollars

Canadians continue to spend less of their income on food than consumers in many other countries, including the United States, says a recent Agriculture Canada study.
And public or consumer subsidies to the agricultural sector are lower than they have been in recent years, in large part because of higher commodity prices but also because of a reduced calculation of the amount of support dairy farmers receive due to rising world dairy prices that brought Canadian prices closer to world levels.
In a snapshot of the agriculture and food industry in 2011, the department’s overview of the sector showed an industry growing and diversifying but also still heavily dependent on public support despite recent cuts.
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“Total government, federal and provincial, support to the agriculture and agri-food sector is estimated to have increased slightly to $7.5 billion in 2011-12,” said the report.
“This represented 26.7 percent of agriculture gross domestic product.”
It said program payments represented more than one-third of the support, followed by research and inspection.
The department said the estimate of the value of government or consumer subsidy to farm receipts in 2011 was 14 percent in 2011 compared to 19 percent in Europe and eight percent in the U.S.
Under international rules, the difference between a “world price” for supply managed products and the Canadian price fixed under supply management rules is considered a “consumer subsidy” that is added to “producer subsidy equivalent.”
The report noted that the European Union and the U.S. have both moved away from regulated farm supports and more toward direct farm subsidies.
It said relative government support for farmers is highest in Manitoba, Quebec and Nova Scotia, and the federal portion of that support is highest in British Columbia, Sask-atchewan and Manitoba.
Canadians assigned on average 9.2 percent of personal spending on food products.
“Canadian households in all income classes allocated smaller shares of their budgets to food than did U.S. households,” said the report.
In 1991, the average portion of the household budget spent on food was more than 11 percent.
