The Rural Voice, 1990-01, Page 22AGRICULTURE IN THE 1990s
A SURVEY
The Rural Voice asked representatives of the agricultural industry to reply to questions about
agriculture and agricultural policy in the 1990s. They were asked to consider what they
would like to see happen and/or what they predict will happen. Those who responded by
deadline are featured below. The questions included the following subjects:
1. The Canada/U.S. Free Trade Agreement (CUSTA)
2. Farm financing and the Farm Credit Corporation
3. Animal rights
4. The U.S. Food Security Act and Export Enhancement
Program
5. The environment and stewardship
6. Crop insurance
7. Development and the preservation of farm land
8. Biotechnology
9. Income support and the Agricultural Stabilization Act
10. The General Agreement on Tariffs and Trade (GATT)
11. Food health and the "organic movement"
12. The federal government's policy discussion paper on
Canadian agriculture: Growing Together — A Vision
for Canada's Agri -food Industry
VIC ALTHOUSE, MP
NEW DEMOCRAT AGRICULTURE CRITIC
FARM FINANCING
An overall change in the way Canada sets its interest rates
is clearly in ordcr. Central Bank rates 4 percentage points higher
than U.S. rates place our producers at a distinct disadvantage. At
12 per cent in Canada, that puts our interest cost 50 per cent higher
... High rates have caused a higher Canadian dollar, resulting in
lower returns for cur exports. Farmers lose both ways with high
rates. They get higher costs and lower prices.
Until then, beginning farmers may need interest relief. Long-
term earnings as a percentage of assets run at 3 to 4 per cent, so
rates much higher than that cannot be easily carried.
ANIMAL RIGHTS
New facilities should be designed with space and healthy living
conditions that meet or exceed current standards. Requirements
may get tougher if experience in European countries is a guide.
THE U.S. FOOD SECURITY ACT AND THE EEP
I do not see U.S. legislators making substantive changes in
1990. In spite of what the president and his administration say on
the international scene about subsidies and incentive payments,
Congress need not comply ...I think the only way the U.S. will
abandon Export Enhancement is if they no longer arc able to
produce a surplus. This may eventually happen in wheat but is a
long way off for corn.
INCOME STABILIZATION
All stabilization and income security schemes should use
the same conceptual model and format to avoid discrimination
between commodities and regions. Price support programs for that
portion of production that is domestically consumed should cover
efficient -producer cost, with the portion of production going to
export covered by a price -insurance program financed by producer
premiums to avoid countervail action.
THE GATT
There may be some modification of GATT rules to reduce
"subsidized products" in world trade. I fear that our government
is willing to reduce the power of marketing boards, particularly
supply -managed boards ... For this reason I fear Canada will give
ground on Article XI. Countervail actions, especially between
Canada and the U.S., will probably increase in the 1990s.
THE FEDERAL DISCUSSION PAPER
The white paper is a statement of faith. It dreams that a true
competitive market exists where buyers and sellers have equal
bargaining power. The reality is that farmers buy and sell in a
oligopolistic market. That is, there are a few buyers who can
manipulate the many sellers when farmers sell their products.
There are a few large suppliers selling to many farmer buyers.
Farmers are price takers. Growing Together seems to be interested
in perpetuating this inequity.
GEORGE ARNOLD, MANAGER
AGRICULTURAL SERVICES, ROYAL BANK
FREE TRADE
CUSTA will hurt dairy
and supply -managed com-
modities the most. It will
affect beef producers the
least. The dispute -settling
mechanism of CUSTA will
probably favour the U.S.
FARM FINANCING
The FCC should assist
beginning farmers with farm
financial management train-
ing. If necessary, the FCC
could provide interest -rate relief to beginning farmers.
could also administer crop insurance and other "safety net" pro-
grams. It should not compete actively with commercial lenders,
as this is duplication.
The FCC
THE FEDERAL DISCUSSION PAPER
This paper makes a lot of sense and appears to be a realistic
approach to the many problems facing agriculture.
20 THE RURAL VOICE