The first Conservative federal budget in 13 years produced $1.5 billion in farm aid promises, a glimpse of some significant short-term policy changes planned by the government, a split in farm organization reaction and some over-the-top political rhetoric.
It also left significant questions, because few details were available about program design.
When will dollars begin to arrive on Canadian farms? How will they be targeted and delivered? Will federal help be available to farmers planting a crop this spring?
“A billion dollars is not small change and don’t get me wrong, we appreciate it,” Canadian Federation of Agriculture president Bob Friesen said in a May 5 interview after a summit of provincial presidents from CFA members decided to write a letter asking how the announcement helps farmers this spring and adds stability.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
“But seeding is under way in a number of areas, farmers need cash and the predictability to go to their bankers and we just don’t see that immediacy or the predictability that is needed.”
The CFA and thousands of farmers who rallied on Parliament Hill in early April have demanded immediate spring cash for farmers and a $6 billion payment over three years simply to replace market losses in the past.
Agriculture minister Chuck Strahl noticed that budget reaction was more positive from many other farm groups and agri-business companies and he took aim at Friesen.
“He has a political agenda as well as a farm agenda and when he gets political, I’m less interested in what he has to say,” Strahl said in an interview.
Finance minister Jim Flaherty used his May 2 budget to announce the first of five promised $500 million annual injections of farm spending plus $1 billion in one-time 2006 spending on a variety of programs, most prominently changes to the Canadian Agricultural Income Stabilization program.
“Current insurance and income support programs are inadequate,” said Flaherty in his budget speech. “Despite showing true resilience in the face of all these pressures, Canadian farmers need even more of our support. This year is a particularly difficult year and we know it.”
So the government will spend money to retroactively change the way inventory has been valued within CAIS since 2003, opening up the possibility of retroactive payments that could particularly help cattle producers whose herds lost value after the May 2003 discovery of BSE.
It will change CAIS to broaden recognition of negative margins in the formula and fund a one-time, as-yet-undefined program to get cash to low-income farm families based on income tax filing. It will spend money on an ethanol and biofuel program.
Strahl also won broad praise from farm groups late last week by announcing in Calgary that until CAIS changes play out and new eligibility claims are made, there will be a moratorium on federal efforts to claw back CAIS overpayments.
Flaherty also confirmed in the budget that the government plans to kill CAIS as soon as it can and replace it with a new income stabilization program and a separate disaster fund. That will be a major topic of discussion when federal and provincial agriculture ministers meet in June but without provincial agreement, existing federal-provincial CAIS agreements do not expire until 2008.
The provinces have said they want to see the principles of CAIS retained but last week, most provincial ministers said they support the CAIS changes the federal government announced.
The two less-supportive voices were Saskatchewan’s Mark Wartman, who said he was “incredibly disappointed” that the Conservatives did not signal they accept the complaint that some provinces have a difficult time paying their CAIS portion, and Ontario’s Leona Dombrowsky, who demanded a meeting with Strahl to make sure Ontario gets its fair share of the $1.5 billion.
The budget commitments led Strahl to insist that money available to farmers is the most ever – $5.6 billion, he said.
“There is an additional billion dollars that no one ever saw (coming) that will go to farmers for a total of $5.6 billion, money that the previous government not only never even promised but never delivered during its entire tenure in office.”
Later, he conceded the figure reflected both federal and provincial spending. The Parliamentary Library produced a briefing note for MPs arguing that the number exaggerates what is really available to farmers.
Liberal agriculture critic Wayne Easter denounced the Conservative plans as the “greatest sell out of Canadian farmers in Canadian history.”
