POLITICAL fallout and the unpalatability of taxes are certain to scuttle a proposal by the Agricultural Institute of Canada, but hopefully not before it has drawn attention to the sad state of the Canadian farm economy and the need for better farm returns.
In a paper released Oct. 30 entitled Big Farms, Small Farms: Strategies in Sustainable Agriculture to Fit All Sizes, the AIC proposes “a consumer levy on food to provide farmers with a stabilized and equitable income to enable greater adoption rates for sustainable practices.”
Its intention is that such a tax would provide about $3.3 billion annually to farmers in addition to the amounts normally budgeted through Agriculture Canada, and would be a stable, long-term funding source for the nation’s farmers.
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The tax would amount to one-fifth of one percent of consumers’ disposable income, the paper said.
But Canadians, farmers among them, have no appetite for more taxes, and perhaps least of all for a tax on the basic necessity of food. Since the Goods and Services Tax came into being in 1991, its transparency has made the country’s taxpayers hyper aware of taxation and its impact on both individual income and national economy.
Additional taxes are less popular than frost in August, and political suicide for any government that implements them.
The tax idea is but one of many contained in the AIC paper, and one that will doubtless meet a stated goal in the executive summary: “to inform the discussion and debate on the issue of sustaining agriculture in Canada.”
Though there is widespread understanding of problems relating to chronic farm income shortfalls, declining rural communities and the need to support a viable farm economy, solutions are scarce.
The AIC must be commended for provoking debate starting at a level where all Canadians will feel it most – the wallet.
It’s a calculated shot, an appetizer before the full meal, if you will. For even as it broaches the idea of a sales tax on food, the AIC notes it is “preferably a last resort as a way to raise resources to ensure economic viability for agricultural producers, but a justifiable one nonetheless.”
Are there other, potentially more palatable ways to address the problem?
Only a few months ago, the Easter report on farm income emphasized the need for farmers to somehow extract more money from the marketplace. In other words, he suggested they need more money from the middlemen.
The conclusion resonated with the farm sector, even if few broached ideas about how such an extraction could be implemented.
A sales tax on food, to be paid by all Canadians, doesn’t seem to fit the bill.
The AIC meets this week to discuss the tax-on-food idea, along with the other proposals put forth in its paper.
Only through such discussion and debate will workable answers emerge.
