SASKATOON – Support prices for prairie grain farmers will be about five percent lower next year.
Payments under the Gross Revenue Insurance Plan are based on 70 percent of a commodity’s average price over the last 15 years, indexed for inflation.
For 1994-95, the high prices of 1976-77 will be dropped from the 15-year average and replaced by the much lower prices of 1991-92.
As a result, support levels next year will decline by amounts ranging from 2.4 percent for hard red spring wheat to 6.5 percent for rye to around 10 percent for mustard.
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“I guess from the standpoint of the producer, to see that price going down like it is under the GRIP program at present, it’s a little disappointing,” said Ron Leonhardt, a Drumheller, Alta., farmer and member of the national GRIP committee.
But he added it simply reflects the reality of world grain markets, distorted and depressed as they have been by the subsidy war between the U.S. and Europe.
The so-called IMAP (indexed moving average price) for 2 CWRS wheat next year will be $195.46. At a support rate of 70 percent, that translates into a GRIP price of $136.82 a tonne ($3.72 a bushel), down from this year’s $140.58 a tonne.
The IMAP formula drops 1976-77, when the indexed price of wheat was $165.35 a tonne, and replaces it with the 1991-92 indexed price of $86.35 a tonne ($2.35).
Canola down 5.9 percent
Among other crops, durum will be down 4.2 percent to $144.90 a tonne, oats down 3.9 percent to $79.47 a tonne, canola down 5.9 percent to $257.52 a tonne and mustard down 9.6 percent to $240.42 (in Manitoba and Saskatchewan).
The fact that the IMAP formula has been kicking out a steadily declining support price while farmers’ input costs continue to rise is seen by some critics as a fundamental flaw of GRIP.
Saskatchewan Wheat Pool vice-president Barry Senft, another member of the national GRIP committee, agreed that the IMAP is far from perfect, but said lower support prices will be irrelevant if market prices remain strong next year.
