WORLD Trade Organization negotiators are wrestling this year with issues that will affect Canadian farmers directly – how much can their government support them, protect them, give them access to new markets? Over four weeks, this column will explore some of the issues at WTO talks past and present and their impact on farmers. This week: divorcing government support from farm production.
It is one of the most profound changes world trade agreements have made in the mentality of farm support planners in the past 15 years and it is one that has the potential to leave farm support programs much more vulnerable to political budget-cutting decisions.
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Farm programs started off being a political commitment to support farmers doing what they do – producing food.
The 1993 General Agreement on Tariffs and Trade, the negotiations that led to the agreement and the torturous talks that have followed changed all that.
Farm support programs now are supposed to be “decoupled” from production. There is not supposed to be a link between how much a farmer produces and how much subsidy is available. That would be an incentive to overproduce in order to qualify for more subsidy.
Of course, not all systems have adjusted to this but decoupling has become the goal for all WTO countries. Farmers can be supported for their environmental impact, their food safety work and their rural landscape preservation but not for their food production function.
And of course, Canada has tried to lead the pack by making sure support programs are as decoupled as possible, related to historic income averages, notional costs and the number of vowels in your grandmother’s name, but never about what is produced.
Farm groups largely have bought into this, reasoning that production support in other countries has produced surpluses and driven down prices.
Decoupling of farm supports from farm production has become orthodoxy.
But it does have its political problems.
Many other jurisdictions, the European Union a prime example, have been creative in finding the environment, food safety, tourism and rural landscape as causes for sending money to farmers.
Canada has been slow to adjust, only now beginning to plot ways to justify farm payments on the basis of “public good” goals like environmental enhancement, land preservation and safe food. There is a danger that consumers and taxpayers will begin to wonder why they have to pay farmers to provide things they already thought were required by law.
A greater danger is that the move to divorce farm supports from production will lead to a public perception that these are simply welfare payments to a business sector that cannot survive on its own.
Assuming Statistics Canada’s inflated figure that there are more than 200,000 farmers, last year’s $5 billion in program payments works out to almost $25,000 per farmer.
If that isn’t going to help farmers be farmers, maybe it’s just welfare to a group that likes to live in the country at taxpayer expense, a right wing group like the Canadian Taxpayers’ Federation might begin to argue.
For years, farm leaders have insisted their sector be treated as a business rather than a way of life. Taxpayer support not to produce food sends a rather different message.
