NOBODY wants to look a gift horse in the mouth and the $1.5 billion announced for agriculture in the recent federal budget is certainly no useless old mare unable to earn its keep around the farmyard.
But the question remains: Does the latest federal budget, the first by a federal Conservative government since 1993, hit the necessary targets?
On the plus side:
- The federal government has promised to replace the Canadian Agricultural Income Stabilization program, which most farm organizations have called for.
- An additional $500 million in farm support, the first instalment of a campaign promise of $500 million each year for five years.
- A one-time injection of $1 billion into agriculture while Ottawa works with the provinces to find a more responsive farm program to replace CAIS.
- Changes to inventory valuation rules under CAIS to better address sudden drops in inventory values during a single year, which should improve the program’s ability to cover farmers’ negative margins.
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The difference between the value of inventory at start of the year compared to the year-end can be used in calculating CAIS payments. Ottawa will cover the retroactive payment and the provinces are expected to share the costs for 2006-07 and 2007-08.
- A program to help the lowest income farmers.
- A crop cover protection program to help farmers deal with flood damage.
- Delayed collections from farmers who owe money from CAIS overpayments.
What did the budget miss?
- No immediate money to help farmers now, in the midst of deep need in the countryside.
- The $1.5 billion falls short of what most farm groups said is needed. The Canadian Federation of Agriculture asked for $6 billion over three years.
- The money will be delivered through CAIS, which has been criticized as too slow and complex.
- The government recognized the farm crisis, but offered few details on longer term plans. The budget mentioned a strategy for a national biofuel program and a desire to help agribusinesses develop new markets, but offered no specifics.
With skyrocketing oil and gas prices, ethanol, biodiesel and other alternative fuels could become a large and vital market for Canadian farmers. The government must move quickly before biofuel plants are built elsewhere.
On balance, the Conservative government’s first budget reads more like a speech from the throne than a budget. It emphasizes principles and good intentions. That could be due to the short time this government had in which to produce the budget, so soon after a rare winter election.
But farmers can’t afford to wait too long for needed improvements. We trust more details are coming soon.
Bruce Dyck, Terry Fries, Barb Glen, D’Arce McMillan and Ken Zacharias collaborate in the writing of Western Producer editorials.
