European and Japanese governments have found a new way to subsidize farmers and they have no intention of giving it up, Canadian farm leaders heard last week.
They will continue to pay their farmers for environmental and social services rendered, even if countries such as Canada consider these payments another production-distorting subsidy.
“These payments are necessary,” French farm leader Jean Claude Sabin told a Feb. 24 seminar on multifunctionality organized by the Canadian Federation of Agriculture.
“Do not think that multifunctionality is some kind of competition.”
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
In fact, that is exactly how some Canadian and New Zealand officials described it, even though they agreed society recognizes that farmers do more than produce food and fibre.
They suggested the Europeans have raised this concept in trade talks and domestic policy as a way to funnel more unfair subsidies to farmers.
“There are ways to provide subsidies for multifunctionality purposes but you do not do it in a way that distorts trade or production,” said Susan Sarich of Agriculture Canada.
Jonathan Fried, assistant deputy minister of the federal international trade department, went further when he spoke to the CFA Feb. 24.
“It causes us considerable concern,” he said. “The problem is when non-trade issues are addressed in a way which end up distorting trade.”
That was not Sabin’s priority.
He said French taxpayers do not mind paying French farmers for such benefits as reforestation, rural stability, a productive and well maintained countryside, and a rural culture.
And payments for such services help replace lower European Union subsidies tied to production levels. Sabin said France has offered five-year contracts to pay farmers more than $40,000 for their environmental and social contributions.
“It is necessary to finance multifunctionality or three-quarters of our farmers would disappear,” he said.
Good and bad
While Canadian speakers decried the use of such payments as a way to keep farmers in business, there also was an argument that such payments can be a source of income for Canadian farmers.
“Multifunctionality is happening today,” said Terry McRea from Agriculture Canada’s environment bureau. “We don’t always use the word.”
He said the government offer to compensate farmers for preserving endangered species habitat is an example.
But the government officials, supported by the CFA, said such multifunctionality payments to support rural activity and farmers must not be done in a way that distorts production or trade.
