Government payments to farmers hit an 11-year high in the first half of 2003.
Producers received nearly $2.03 billion through programs such as crop insurance, Net Income Stabilization Accounts and income disaster assistance for the first half of the year.
That compares to $1.13 billion for the same period in 2002, and an average of $1.01 billion annually over the past 10 years. Analysts say this year’s high payment makes sense because last year’s drought was one of the worst in recorded history.
But to get a true picture of what has happened with subsidies, one has to go back further, said University of Saskatchewan agricultural economist Ken Rosaasen.
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“The federal government has significantly pared back payments over the last 15 years to farmers,” he said.
Rosaasen recalls Gross Revenue Insurance Program payments of $3.1 billion for grains and oilseeds alone in 1991, but that was a full year’s worth of payments.
Farmers also used to receive hundreds of millions through Western Grain Transportation Act payments. That number was never officially recorded as a producer subsidy because it was paid directly to the railways.
Canadian Federation of Agriculture president Bob Friesen also called the federal numbers misleading.
He said governments put the same amount of money into safety nets each year. The only variable is crop insurance, a program producers help fund.
Crop insurance payments rose more than $700 million between the first six months of 2003 and the same period last year.
It accounts for more than half of what has been paid so far in 2003, a situation that doesn’t surprise agricultural economist Murray Fulton.
“That’s where the drought is coming in,” said the University of Saskatchewan professor.
“We’re in a situation where it’s not unexpected that payments would have risen.”
Withdrawals from NISA also went up $94 million from 2002. But that program still only accounts for 15 percent of total government payouts year-to-date.
“This is a further reflection of that ongoing debate of what role NISA plays,” said Fulton.
For whatever reason, farmers don’t always match their NISA withdrawals with the time of greatest need.
“It’s clearly not playing that dominant role that people were hoping it would play in terms of income assistance,” he said.
Another theme hidden in the numbers is the federal government’s distaste for paying out money through income disaster assistance programs, which accounted for $190 million, or nine percent, of the 2003 total.
“It’s pretty obvious that they’re not using that particular fund to deal with some of these things,” said Fulton.
“It’s an attempt to try to make this a little more program based rather than ad hoc.”
