ACHAIN is as strong as its weakest link. In terms of profitability in the agri-food chain, recent farm income numbers show that the weakest link financially is the first one, the primary producer link.
It has become trendy at agriculture industry meetings for speakers to point out that agriculture as a whole is doing well in the Canadian economy. It contributes billions to the gross domestic product. It is responsible for hundreds of thousands of jobs. Processors, manufacturers and retailers for the most part prosper in handling agricultural goods. The links in the chain are strong, with that aforementioned exception.
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The Easter report, a study of Canadian agriculture released last year, emphasized this problem and made recommendations to address it. Earlier this month, the George Morris Centre released a report entitled Beyond Easter: Framing a Comprehensive Canadian Agri-food Policy.
It is useful and in fact essential to analyze the Easter report, since its conclusions and at least some of its recommendations could form the basis for future Canadian agricultural policy. But while the George Morris report takes issue with many of Easter’s conclusions, it still fails to suggest reasonably expeditious ways to improve income for Canadian farmers, the first link in the value chain.
That Canadian farm income needs improvement is glaringly obvious from projections released in January by Agriculture Canada. The department predicts a 54 percent decline this year in realized net farm income across Canada.
Saskatchewan, Manitoba and Prince Edward Island are projected to have negative farm income. These projections take into account an estimated $4.1 billion in program payments to farmers.
The George Morris Centre’s analysis of the Easter report agrees that deregulation could help producers achieve profitability. Likewise it agrees more interaction and understanding of end-user needs would help. The Centre further supports the idea, broached in the Easter report, that interprovincial regulations and tax policies that stifle entrepreneurship hamper farm profitability.
But its suggestions that greater international market access and reduced subsidies in this and other countries will improve farmers’ bottom lines ignores the fact that increased market access in the past 10 years hasn’t translated into improved farm income.
And its suggestion that erosion of Canada’s supply-managed industries holds benefit are severely weakened by statistics that show farmers in supply-managed industries are among the few with positive farm incomes.
Where is the future of farm policy? Parts of it may lie in increased trade, partial implementation of the Easter report and in the George Morris initiative to help develop an agri-food policy.
Whatever form it takes, it must reorient national agricultural policy so the primary producer, the first link in the chain, can prosper along with the rest.
