Grain farmers are not the only ones benefiting from the doubling of many commodity prices. Governments are also breathing a sigh of relief.
When Harvey Brooks took over as Saskatchewan’s deputy agriculture minister in June 2006, the outlook for the farm community and his department couldn’t have been bleaker.
“Not only couldn’t we see the light at the end of the tunnel, we couldn’t see the tunnel,” Brooks told delegates attending CropLife Canada’s annual convention.
Eighty percent of his departmental budget was dedicated to crop insurance and income stabilization efforts, which meant little money left over to fund the kinds of research and development efforts CropLife is pushing for.
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“How do you get to your preferred future if you’re investing in the maintenance of your industry?” Brooks said.
But soaring commodity prices caused by a combination of production shortfalls and newfound biofuel demand has changed all that.
Saskatchewan’s realized net farm income is expected to reach $839 million in 2007, up from $196 million in 2005.
“Not only is our current reality brighter, so is our future,” Brooks said. “Can you imagine what this would be like if we were dealing with a 65 cent dollar right now? This industry would just be off the charts.”
In an interview following his presentation, Brooks said the new commodity price environment means less of his budget will be devoted to survival measures so that more can be spent on other pressing issues.
“As prices go up, certainly the reliance on income stabilization is reduced,” he said.
Saskatchewan Agriculture economists predict prices will be strong for another five years, allowing the department to rejig its spending priorities.
Brooks said funding still needs to be set aside for crop insurance because that is a weather-dependent rather than price-dependent expenditure, but he foresees more provincial spending on research and development projects under this new environment.
“That’s a bright area for our future,” he said.
Saskatchewan Agriculture spends $13 million annually on agriculture research. This year it received a special one-time expenditure of $41.5 million from the federal agricultural policy framework.
