A Watershed Year for Farmers

Leo Guilbeault, Chair Ontario Grains & Oilseeds

The Christmas holiday is always a good time to rest and reflect, especially for farmers who are still wrapping up an unusually long harvest season.

For most people, a challenging year usually ends on a hopeful note, with a commitment to persevere and take control of the things that can affect your future. Unfortunately for farmers, there is little they can control to turn a bad year into a good one.

Ontario’s 25,000 grain and oilseed farmers have been fighting for survival over the past five years. It’s not because of the weather or the environment. It’s not because there isn’t enough farm land to grow the beans, corn, wheat, barley and other commodities Ontarians enjoy every day. In fact, quality and yield have never been better.

2007 will show if grain and oilseed
farmers still have a future

The problem is the rest of the world. Agriculture is the last sector in which the industrialized world wantonly subsidizes for political gain at home, especially in the United States. This results in artificially low world prices, as anyone with a basic grasp of economics can tell you.

That’s OK for farmers in those countries – government support allows them to earn a living in spite of the market. Not so here in Ontario.
Farmers here don’t have the same levels of support, and they can’t go to Washington, Brussels or Paris and tell politicians in those countries to let the real market work the way it should.

When the economists and bureaucrats look up from their charts, then they will see the real story: In Ontario, an entire generation of families
is pulling out of the farming business because they can’t afford to carry on producing on land where, in some cases, it costs twice as much to grow the crop than the farmer will ever receive from a severely skewed world market.

The Canadian Senate’s agriculture committee recently released a report, “Understanding Freefall,” that stated low farm incomes caused by the
subsidy madness was turning farmers into poverty-stricken second-class citizens.

“Persistent low farm incomes have created some serious problems for farmers in many parts of the agricultural sector…Hardship on the
farm is leading to a situation where farming is seen as a life with few prospects [and] where depression, crisis and/or debt seriously impact many farm families,” the report said. In Ontario, about 1,250 growers are dropping out of the farming business every year, and over 6,000 grain and oilseed farming households – the entire family! – are living on income under $25,000, according to Statistics Canada data.

Agriculture analysts say it takes a minimum income of $100,000 a year to make the smallest farm economically viable, but 52 per cent of Ontario farms report less than that in income. A further 21 per cent of farms have incomes just slightly above that critical threshold, according to the Institute of Agrifood Policy Innovation.

The Canadian and Ontario governments have acknowledged this income crisis, but continue to offer only ad-hoc aid, too little and too late,
through the widely reviled Canadian Agricultural Income Stabilization program.

Besides, farmers don’t want handouts. They want a market that works. The Ontario grains and oilseeds sector, which produces nearly $4-billion worth of crops annually, has asked the two levels of government to move away from handouts and toward a stable and sustainable insurance-based Risk Management Program to replace the CAIS debacle.

The federal and provincial governments would administer the program, but farmers would also pay into it through premiums. This system
would be fair, and would not result in more spending by government, instead replacing the hodge-podge of aid programs that no one believes to be effective.

We fear that 2007 is going to be a watershed year for the future of the family farm if the governments turn its back on the Risk Management Program. We fear that more farmers will leave the business, and those who remain will go deeper into debt, into poverty and into despair. We fear the end of the family farm, as we know it.

One thing is for sure: the cycle of the farm income crisis is quickening and deepening.

Ontario farmers, and Ontarians in general, don’t want handouts or subsidies. They want the stability offered by protection from worldwide farm subsidies.