Blaming foreign subsidies for the current farm income problem in Canada is an attempt by governments and economists to divert attention from the real problem of market failure, says a new study published by the Canadian Centre for Policy Alternatives.
Holding out the promise of a solution through a future World Trade Organization agreement is a false hope meant to keep farmers dreaming of impossible and distant answers, argues National Farmers Union executive secretary Darrin Qualman in the report.
“Most corporate executives, journalists, economists and politicians point toward false promises and encourage farmers toward false solutions,” he writes.
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“Farmers are encouraged to blame themselves, farmers across the border or across the sea, their marketing agencies, their own government or foreign governments.”
Although Qualman does not offer a solution, he does identify what he believes to be the problem.
“The real problem for farm families is an imbalance in market power and a resulting imbalance in the distribution of profits in the agri-food system.”
It is an analysis that Qualman and the NFU have made before, at parliamentary committee hearings and union meetings.
But its appearance as a discussion paper issued by the Ottawa-based policy centre will give it a wider urban and academic audience.
The centre is a 20-year-old research institute dedicated to looking at social and economic issues “from a progressive point of view.”
Qualman supports his arguments with statistics showing that while the European Union and the United States have been the major grains and oilseeds subsidizers in the past two decades, production increases have been greater in countries that offer fewer or almost no subsidies, including Canada, Argentina and Australia.
Meanwhile, he dismisses the claim that oversupply is the reason for low prices and farm incomes by noting that stocks in storage would feed the world for just 69 days, a much lower level than in the 1980s.
He also notes that while gross farm incomes have tripled since 1974 “…their net incomes have declined.”
Qualman stated that the five-year average return on equity for farmers to 1998 was 0.7 percent, he said. Meanwhile, he reported that agribusiness corporate rates of return on equity are normally double or triple digit.
“If farmers enjoyed returns on equity comparable to those enjoyed by other players, there would be no farm income crisis,” Qualman concludes.
