Grain farmers must avoid ‘me too’ temptation

While program details are still being determined, it appears cow-calf producers will eventually receive payments totalling about $200 per bred cow. This logical, co-ordinated response from the two levels of government should be applauded. | File photo

With AgriRecovery funding in place from Alberta, Saskatchewan, Manitoba, Ontario and a decision pending from British Columbia; and with federal cost-sharing of 60 percent now announced, cattle producers know they will have a bit of support to defray sky-high winter feeding costs.

This has left some grain farmers pouting as they too hope for government largesse.

While program details are still being determined, it appears cow-calf producers will eventually receive payments totalling about $200 per bred cow. This logical, co-ordinated response from the two levels of government should be applauded.

Feed is so expensive and conditions so dire that $200 a head won’t stop a herd downsizing, but perhaps it can prevent a massive selloff. It is an extraordinary situation that warrants a response over and above existing programs.

What about grain farmers? Since we’re now in the midst of a federal election isn’t this a great time to press the parties for extra assistance should they form government?

The short answer is no. The situation facing grain producers is much different.

Yes, yields are ugly over a huge region, but grain prices are record high. Half a crop produces the same gross return when prices have doubled.

Many producers will grow much less than half a crop and what they do harvest may already be priced at levels way below present market values. Many will not have enough grain to fill contract obligations and will need to buy out contracts.

There will be a great deal of financial hurt, but there will also be producers who do quite well. A broad-based program like the one being advanced for cow-calf producers makes no sense in the grain sector. The situation from one region to another and one farm to another is far too variable.

Plus, grain producers have an effective multi-peril crop insurance program that will pay out billions of dollars. It would be interesting to know how many large farms end up receiving a cheque for more than a million dollars from crop insurance. My guess is quite a few.

Crop insurance has some offerings for cattle producers, but the level of support is minuscule compared to grain.

Federal Agriculture Minister Marie-Claude Bibeau continues to offer an increase in AgriStability support from 70 to 80 percent, but the prairie provinces balked at paying their share. The issue would appear to be dead. Most producers aren’t enrolled in the program anyway.

While few have anything good to say about AgriStability, any program that protects against revenue shortfalls for individual producers needs to measure revenue and no simple mechanism exists for doing that.

Beware of politicians claiming they will fix AgriStability or come out with a superior program unless they can provide details.

Beyond governments sending money, the drought has raised issues that should be addressed. Many grain contracts are one-sided and couched in legalese that makes them difficult to decipher. Also, some grain companies are being criticized for large administration fees on contract buy-outs.

It’s difficult to know what role governments can play on these issues, but they are legitimate concerns. Hopefully, producers will have long memories on which companies were good to work with on contract shortfalls and which ones were not.

But the problems in grain are nothing like the concerns of cow-calf producers. The vast majority of grain farms will survive to put another crop in the ground. Many cow-calf producers will seriously downsize their herd or even get out of the business.

Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.


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