The Senate agriculture committee is recommending the federal government create a direct acreage payment for grain and oilseed producers that would last up to four years and likely cost billions of dollars.
However, the committee report issued June 22 is vague on details. It does not recommend how the payments should be calculated nor estimate how much it will cost. The proposed new scheme would be in addition to existing stabilization and production insurance programs.
The committee recommends that payments should be based on historic yield and acreage on individual farms, offering payment predictability for farmers and making Canadian support competitive with the United States farm support program.
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“A payment tied to historical acreage and yields will not provide an incentive to increase production in the current year,” said the report. “Furthermore, it would target what many consider as the base of agricultural production in Canada, the grains and oilseeds industry, which benefits the livestock industry, the biofuel industry and agrifood processors.”
The evidence is that many farmers have been losing money because of a combination of low commodity prices, rising costs and BSE, said committee chair and Alberta Liberal senator Joyce Fairbairn.
A direct multi-year acreage payment program as a top-up to other business risk management programs “is the best way to send money quickly to farmers to help them bridge that gap in the short term,” she told a news conference.
The senators also recommended that the government develop a Canadian farm bill that includes infrastructure investment, payments for the environmental benefits of good farm practices, research spending and encouragement for farmer involvement in value-adding enterprises.
However, there were few specifics on the criteria that should be used for calculating the acreage payment.
Would it cover cost of production or income losses, senators were asked.
“Well the whole idea would be to prop up the income that farmers are getting when they, for the last three years, have dropped below into a negative margin completely,” replied Saskatchewan Conservative senator Len Gustafson.
Vancouver Liberal Larry Campbell, whose in-laws farm at Dubuc, Sask., said the payments program would be aimed at dealing with “the gaping hole” that has developed as farm incomes fall and input prices rise.
“Either we can take it on and do something about it now, or we can watch us fall to the point where we simply do not produce our own food,” Campbell said.
The committee also announced a series of hearings across Canada beginning in the fall that will hear evidence on the potential of the biofuel industry.
Nova Scotia Liberal Terry Mercer said a key issue in a biofuel strategy is whether farmers are owners or merely feedstock providers.
“If we’re going to get into the biofuel business in a big way and the major oil companies are going to be the major benefactors, then it doesn’t do the farm community any good,” he said.
