Ottawa’s budget decision to cut a popular farm loan guarantee program continues to rankle Saskatchewan politicians.
Saskatchewan agriculture minister Mark Wartman has written to his federal counterpart, Andy Mitchell, asking him to reconsider, but told reporters last week he has had no response.
“This is very frustrating when Saskatchewan has had the greatest uptake in terms of this loan, that the minister of finance cut it,” he said March 16. “I think the agriculture department federally has to do more to stand up for the people of this province.”
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In the legislature the same day, agriculture critic Bob Bjornerud noted that Saskatchewan accounted for about 80 percent of the loans approved under the Farm Improvement and Marketing Co-operatives Loans Act.
“In the third quarter of 2004 alone, Saskatchewan credit unions made about 500 such loans to the tune of $15 million,” Bjornerud said.
In fact, about 4,000 loans are approved annually, worth an average total of $110 million.
“They took it out, I gather, thinking that it wasn’t really all that important but I don’t think they realize what the impact was on Saskatchewan,” Wartman said.
Program origin
The loan program was introduced in 1988 to help farmers finance farm equipment and buy land, and to help co-ops process, distribute and market farm products.
Farmers could apply for up to $250,000, and $3 million was available for co-ops. The federal government guaranteed 95 percent of the loans.
Since the program’s inception, more than 130,000 farmers and co-ops have used it.
Wartman said he hoped Ottawa’s silence is an indication that it is looking for another way to provide the same type of program.
Meanwhile, Bjornerud took Wartman to task for provincial funding of the Canadian Agricultural Income Stabilization program. He said farmers need to know right away if the province will contribute its full share for the 2004 CAIS, rather than waiting until the end of the year to find out.
Wartman repeated the government’s commitment to spend an average of $100 million a year during the five-year program.
He said it’s unlikely the province would be able to spend more than $100 million this year and lesser amounts in the future.
“The way the projected numbers are coming, this program would be bankrupted pretty quickly and that’s frightening to me,” he said. “The numbers are huge.”
Last year the province received big shock just weeks after it announced its $100 million commitment in the March budget, when Ottawa’s first estimates came in between $220 and $360 million.
The minister said the range for 2004 is $179-$206 million, and for 2005 it is $228-$245 million.
“We don’t have a lot of confidence in the projections,” Wartman said. “But again, what the federal government says when we press them on this is, ‘well, it’s still new, we’re trying to get a better handle on how we do the projections.’
“That still leaves us at 10 times the provincial per capita average for Saskatchewan, which is just wrong.”
The 2005-06 provincial budget was to be announced March 23.
