THERE is a remarkable change of tone taking place in the underlying message that the federal government is receiving about the real state of Canadian agriculture, a change that may well undermine the government’s appetite to continue expensive support payments to the industry.
It usually goes unchallenged these days when eminent economists state as mere background that traditional Canadian agriculture is no longer competitive in the world. Costs are too high and commodity prices are too low to make a profit many years, global industry players are too strong and concentrated and the rules under which Canadian farmers must operate are too restrictive and cost inflicting compared to many competitors.
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A decade ago, that view would have provoked strong reaction. Two decades ago, it would have been heresy.
The message then was that Canadian farmers are the most competitive in the world if only other countries reduced their subsidies and opened their markets. In bad years, government help was justified because it was just temporary, to help farmers get through a bad spell.
No more. The down cycle seems permanent in many sectors and government support programs seem designed to stabilize poverty.
This week, University of Saskatchewan economist Hartley Furtan is telling finance department officials in Ottawa that the prairie grain economy is uncompetitive in world terms. Last week, retired University of Guelph economist George Brinkman applied that argument to the entire Canadian farm economy – too high-cost, too much equity investment for too little revenue, too much debt.
Even former deputy agriculture minister Gaétan Lussier, now chair of the Canadian Agri-Food Policy Institute housed in an Agriculture Canada building, routinely notes in public speeches that Canada’s competitiveness compared to emerging agricultural export powerhouses has been falling.
And of course, the report from Liberal MP Wayne Easter last June argued that the underlying reason for a decades-long decline in farm incomes is a lack of market power, not a situation that can be easily or quickly reversed, if at all.
All this comes after decades during which farmers listened to prescriptions from economists and bureaucrats on how to stay or become profitable – expand, cut costs, diversify, buy into value adding.
Most who have survived have done all that and yet the industry is now routinely described as uncompetitive and government program payments routinely exceed farm realized net income.
The new prescriptions sound old or uninspiring – diversify, seek economies of scale, become better marketers, look for high-priced niche markets.
This gloomy analysis from the economists must give policy makers pause as they contemplate another year of farm losses and multi-billion-dollar demands on the treasury.
They can be reminded over and over that farmers are the base for a highly profitable and huge food industry in Canada but still, the inability of the farm sector to extract a reasonable share of that industry profit can’t help but corrode their responsiveness to industry approaches.
The government response so far seems piecemeal and uninspired. The new prescriptions for success seem limited.
Where are the creative thinkers?
