Why Jack Smiles
Economist analyses federal funding for farmers

SPENCERVILLE — Prime minister Jean Chretien and Minister of Agriculture Lyle Vanclief chose a cash crop, beef and hog farm, called Buckstop Farms, to pledge $5.2 billion in new investments in agriculture over the next five years.

If all provincial governments at meetings in Halifax agree to the federal package and kick in an additional 40 per cent, the amount would reach $8.18 billion.

The safety net programs in place before the federal announcement, including NISA, crop insurance, market revenue and disaster relief, would pay out $9.1 billion over the next five years. The latest federal package with full provincial participation would provide $4.1 billion in new money. Says Brian Doidge, economist with the Ontario Corn Producers’ Association, "Our calculation brings the total amount to just shy of $13.1 billion."

But he’s concerned that too much of the money will find its way into administration and into creating a vague federal vision for agriculture. Only $1.2 billion of federal money, $600,000 per year over the next two years, will be given for trade injury or natural disasters. Under the last assistance package, Ontario’s share was 21 per cent, but Doidge doesn’t know how this money will be divided this time.

Unlike the U.S. Farm Bill, the new federal program is not commodity specific. "We have concerns," he says. "There is a lot of uncertainty and a lack of clarity."

When questioned by reporters at Spencerville, Chretien repeated his belief that subsidies are "stupid" but that in an economic global war Canadian farmers need help from a "wrong-headed U.S. farm bill."

The details between the provinces and the federal government are expected to be hammered out the end of the month when the provincial ministers of agriculture meet. "But at this point, we don’t know whether or not the program will require cross-compliance," he says. Cross compliance means a province would have to take everything or nothing.

The assistance is focussed in five areas: Food safety and quality, the environment, skills and renewal, science and innovation and management of farm business risks.

Most farm organizations have endorsed the new federal package. Liam McCreery, chair of the Ontario Soybean Marketing Board called the program "excellent news". But Dennis Jack was more guarded: "We are strongly supportive...to see that the transition money is distributed on the basis on need."

Alain Leduc, a cash crop farmer, says "There is no new money this year." He believes Canada should have followed the U.S. lead and made the grants commodity specific. Under this program much of the money will not find its way to Canadian farmers.