"NOW OPEN TO SERVE YOU"

Michael Chong, M.P.

Wellington-Halton Hills

Toll Free: (866) 878 5556

Email: Chong.M@parl.gc.ca

http://www.mikechong.ca/

Agriculture - Supply Management

Part 2 of 3

May 25th, 2005

OTTAWA - The previous column pointed out that Canadian farm incomes have dropped dramatically in the recent years, especially in non-supply managed sectors of farming.

What are the causes?  One problem is that our farmers have inherently higher input costs than other jurisdictions, especially in the developing world.  We have higher standards, from more stringent food safety standards to stricter environmental controls, and higher land costs, especially in Ontario.  These all create higher baseline input costs for the Canadian farmer.  Another problem is depressed commodity prices, a result of the “green revolution” - the massive increase in global agricultural output due to new technologies.  Yet another problem lies in the fact that European and American governments provide greater subsidies and support for their farmers than do we.

Some say that the solution is for more productivity.  My guess is that the greatest productivity gains have been had.  No other sector has increased its productivity over the last 50 years like agriculture.  Any additional gains would probably not be sufficient to compensate for the drop in farm income and could likely only be achieved through even larger farm operations, leaving no room for the family farm.

Others say that the solution is to move to freer trade by eliminating import restrictions, let the cheapest producers prevail and allow the marketplace to determine what food will be sold here.  The problem with this is that U.S. and European counterparts may not honour these trade agreements.  Witness what happened with the unjustified U.S. pork countervail duties that were applied to Canadian pork, or the recent border closure to Canadian beef, or the current woes in our softwood lumber industry.  You cannot have freer trade if one of the two parties to the deal will not abide by the rules.

But even if freer trade was agreed to and the rules followed, our farmers would not necessarily have a level playing field as they would still face higher baseline input costs than other jurisdictions.  They may also still face low commodity prices.  This could all lead to even greater Canadian consumption of foreign foodstuffs to the determent of domestic production.

Last year, governments in Canada made $6.3 billion in profits from gambling, double the amount that Canada’s farmers made.  There is something inherently wrong with the setup of things when governments make twice as much from gambling, as those who put food on your table make from farming.

We have presented many of our farmers, especially those in many parts of Southern Ontario, with a Faustian bargain:  Keep farming and make so little money that you have to take one, or even two off-farm jobs to pay the bills, or sell your land for great profit.  Given this choice, it is a wonder that many farms still remain.

Part 1 ...

Interactive/comments ...