INDEPTH: AGRICULTURE
Battling foreign farm subsidies
CBC News Online | August 6, 2004
For years Canada's farmers have been at the short end of the stick when it comes to farm subsidies. European farmers got the most state help, then Americans, then Canadians. No matter how severely Canadian farmers were hit by drought, hail, flood or grasshoppers, they stood with hat in hand well behind their European and American cousins.
Jocelyn Hainsworth, who farms a spread in southeastern Saskatchewan with her husband Glen – and writes a farm column for CBC News Online – voiced the lament of many Canadian farmers last month when she wrote that Agriculture Minister Lyle Vanclief reminds her of dolls you squeeze to make them speak. For Hainsworth the Vanclief doll always says, "There is no more money for farmers."
It hasn't always been the case. Sometimes governments come through, even Ottawa.
In 1999, following a brutal autumn for farmers across the country, Ottawa came through with what it called "a farm aid rescue package." It was Canada's response to hog and grain prices that had been dropping like an elevator in freefall. The package also tried to shore up Canadian farmers facing competition from heavily subsidized farmers in Europe and the United States.
Here's how bad the farm situation was in the late 1990s:
- Manitoba farm income fell from $428 million in 1997 to $132 million in 1998;
- Saskatchewan farm income fell from $680 million in 1997 to $189 million in 1998;
- The price of pork in Canada dropped to $60 a head in the fall of 1998, down from $189 in the summer of 1997;
- 80 per cent of Canadian farms are supported by off-farm income.
On the farm subsidy front, farmers in Europe received subsidies of about $6 a bushel, U.S. farmers got $2.50 a bushel, Canadian farmers received subsidies of only 40 cents a bushel.
The farm aid rescue package of 1999 amounted to $1.5 billion, $900 million from Ottawa, $600 million from the provinces.
Ottawa announced a similar farm rescue package Friday, for essentially the same reason, to battle foreign farm subsidies. Prime Minister Jean Chrétien and Agriculture Minister Lyle Vanclief appeared in Spencerville, Ont., to deliver the news.
The Ottawa plan is expected to offer farm aid of $5.2 billion over five years, with the same proportion offered in 1999: 60 per cent from Ottawa, 40 per cent from the provinces. If the provinces kick in the 40 per cent, it could amount to an aid package for farmers of about $8.18 billion over five years.
Saskatchewan Premier Lorne Calvert says Ottawa should pay the full cost of the aid because the current situation is a trade issue, which is a federal responsibility. Calvert says the recently announced U.S. subsidies to farmers – $190 billion over 10 years – will be carried entirely by the federal government, with the states not required to pay any portion of the aid package.
The latest Canadian farm figures from the agricultural census for 2001 show a significant decrease in the number of Canadian farms.
Statistics Canada reported that between 1996 and 2001, the number of farms in Canada slipped to 246,923 . The 11 per cent drop is the fastest between censuses since 1971. But, seven out of every 10 farms counted in the 1996 census still existed in 2001, those that remained in business generally got bigger, and some new farmers did get into the business. Approximately 50,000 new farms entered the agriculture sector since the 1996 census.
It seems that it is mostly the smaller farms that are dropping out of the industry, although these farms still comprise two-thirds of all farms in Canada. Almost half of farms with less than $25,000 in total revenue counted in the last census had left farming by 2001.
Those who stay in the agriculture sector are showing increased production rates and, overall, are producing more with less. Wheat is still the most highly produced crop, covering one-third of all field crop area, but its numbers are slipping as farmers try out more profitable crops. Also, numbers show that more farmers are converting crop farms to combination crop and livestock farms due to the falling wheat prices and rising livestock prices. As a result, cattle numbers were up and they were being used to serve the export market to the United States.
Hog numbers are up by 26 per cent, although farms with hogs are down by 27 per cent. International demand due to the low Canadian dollar and tariff reductions has made Canadian pork the choice of Japan, Mexico and the United States.
Poultry numbers are also up, especially in Eastern Canada. Canadians are eating more chicken, at nearly 29 kilograms a year per capita. Egg consumption is also up from a low of 14 dozen per capita in 1996 to 16 dozen in 2001. Farmers reported 126.2 million hens and chickens in 2001. Ontario and Quebec are the top two producers.
Greenhouses have doubled in area since the last census, especially in southwestern Ontario. The majority of Canada's 18 square kilometres of greenhouse space is in this area. Flowers are still the dominant greenhouse product, but with consumers demanding fresh produce year-round, vegetables are catching up.
In the fields, sweet corn has dropped in surface area, but it is still Canada's leading vegetable in terms of area covered. Beans, which ranked fifth in the last census, have risen to third place, showing the highest increase in Canada's top five vegetables.
Also, grapes have flourished in Canada, increasing 41 per cent in five years – the largest increase in area of Canada's top five fruits. Blueberries have exceeded apples in area covered, but this is largely due to an increase in apple imports to ensure year-round supply.
Organic farming is becoming more popular, with 2,230, or one per cent of all farms, producing at least one certified organic agricultural product. Saskatchewan led the list with 773 certified organic farms, followed by Ontario, Quebec and British Columbia, in that order.
Farming can be a tough, but lucrative business. However, in the past few years, farmers have found that their expenses are rising while their profits are dwindling. Dairy farms have been spending the least in operating costs for every dollar of sales, spending 75 cents for every dollar taken in. Cattle farms spent the most at 94 cents for every dollar in sales. However, the largest farms had the best ratio of expenses to sales, and the smallest farms had the worst. Total farm revenue was $38.3 billion in 2000, while operating expenses reached $33.2 billion. Five years earlier, revenue was $32.2 billion and expenses were $26.7 billion.
The census counted 200 farms in the territories –170 in the Yukon and 30 in the Northwest Territories. Nunavut, had no farms. Farms in the territories are smaller than in the south, averaging under 150 acres. Some farm operations in the Northwest Territories are unique because they commercially harvest wild animals. Reindeer, musk-oxen and horses are the most common animals found on territory farms. Farms in the Yukon tend to grow hay and have horses. Hay accounts for three-quarters of total field crops in the territories.
The use of computers on farms has risen significantly since 1996, showing that more farms, particularly larger farms, are turning to technology. In 2001, computer use stood at almost 40 per cent, compared with 21 per cent in 1996. Eight out of 10 farm computers are used for bookkeeping. Seven of 10 farmers surfed the Internet for such information as commodity prices and weather reports.
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