Within months, the federal Conservatives will propose changes to farm support programs that will take more account of farmer production costs, agriculture minister Chuck Strahl said last week.
He said Ottawa will challenge provinces at a federal-provincial ministers’ meeting in June to support and co-fund the new ideas to enrich farm supports.
“The provinces’ fallback position is that with their ideas and my money we could really do something,” Strahl said Feb. 8. “My response is that it is a shared jurisdiction so let’s co-operate. Ideally, it is fed-prov and that’s why as the prime minister has already said, we’ll be coming up with proposals in advance of June that I hope the provinces will participate in.”
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Earlier in the week, prime minister Stephen Harper raised some farm leaders’ eyebrows by promising federal action on the farm support file.
“Farmers can look forward to additional measures in the development of the government’s new income support programs, particularly in dealing with the issue of cost of production,” Harper said in a Feb. 6 speech previewing the expected March budget.
Strahl said this simply reflected the Conservative campaign commitment in 2006 to incorporate production costs into farm programming.
Comments by Strahl and the prime minister came in the wake of the Feb. 5 Agriculture Canada projections that suggested while Saskatchewan and Manitoba farm economies will experience sharp improvements this year in realized net farm income because of higher prices for grains and oilseeds, Alberta income will be stagnant and Quebec and Ontario will experience sharp declines.
In Ontario, which boasts Canada’s largest farm economy, realized net farm income this year is projected to collapse from almost $400 million in 2005 and a slight negative in 2006 to minus $200 million this year.
In Quebec, realized net income that takes account of depreciation is projected to drop 63 percent this year to $204 million.
These projections are politically troubling for election-bound governments in Ottawa, Toronto and Quebec City where scores of rural seats are at stake.
A key part of the federal analysis, supported by provincial governments, is that higher grains and oilseeds prices will cut into the profitability of livestock sectors.
Farm leaders say the income projections will increase pressure on governments to improve farm programs.
“This just shows our work is not done yet,” Canadian Federation of Agriculture president Bob Friesen said. “The challenge is huge. Governments have to step up to the plate.”
He said cost-of-production factors must be built into farm support programs.
Ontario Federation of Agriculture president Geri Kamenz said Feb. 8 that the income projections reinforce the OFA campaign to convince the Ontario government that it should fund a cost-based provincial program for grains and oilseeds.
Provincial agriculture minister Leona Dombrowsky has called for proposals from her bureaucrats by mid-March on the outlines of a program. Her Liberal government will go to the polls in October.
“I think the fundamentals are in place to see the government act,” said Kamenz. “The numbers are clear. I think we have some leverage with an election coming.”
The Ontario farm leader said the farm income projections will be a major focus when the CFA annual meeting is held in early March.
Federal minister Strahl said he hopes the final numbers are more positive as they capture a greater-than-expected grain price spike in 2007.
But he also acknowledged the problem that good grain prices means reduced profit in sectors that use grain as feed.
Current consultations on future agriculture programming specifically asks farmers about flaws in business risk management programming, he said.
