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The Rural Voice, 1990-04, Page 98BRUCE 446 10th St., Hanover, Ontario N4N 1P9 519-364-3050 The Rural Voice is provided to Bruce County federation members by the BCFA. County Federation of Agriculture NEWSLETTER OTTAWA BRIEF Bruce County federation members— Bill Davis, Grant Collins, Bob Bregman, Tony Morris, Gerry Poechman, and Ron Garland — recently made a lobbying trip to Ottawa. Following is most of the text of the brief they presented: We are here to express the concerns and ideas of our membership to the politicians and bureaucrats who affect Canadian agri- cultural policy. Today we would like to touch on several issues, such as the GST, CUSTA, farm financing, crop insurance, the GATT negotiations, tripartite, and environ- mentally sound agriculture. With the Canada -U.S. Trade Agreement now 14 months old, farmers generally have not seen any positive effects. We still have pork countervails, causing uncertainty and mixed signals in the pork industry. Until recently, Canadian farmers and processors were harassed by unnecessary and unwar- ranted border health inspections on food products. We feel that our govemment should be retaliating against these harassing non -tariff barriers. The U.S., rightly or wrongly, takes action to protect its farmers first and prove the hurt later. In Canada we allow thenegative effects to strike the farmer and then take action, in many cases several months after the damage is done. A recent government advisory group recommended that food processors in this country be able to buy raw materials at U.S. prices to remain competitive. With farm input prices on a Canadian standard, there is no way farmers can meet this demand and be economically viable. We urge you to recog- nize that these raw material costs are only a portion of the expense equation. We hear nothing about decreasing labour and pack- aging costs, or even reducing the govern- ment's tax cost to these processors. For a farmer to sell at U.S. prices, we must insist on U.S. prices for inputs, something not now available under the trade agreement. It would appear that a par dollar is inevi- table under the agreement. For farmers this will be disastrous, for as large exporters of food in raw and processed form we need a lower dollar to get into world markets. Rais- ing the Canadian dollar value from the mid - .70 mark to the mid -.80 mark has cost a beef farmer about $85 a finished steer. We feel the effects are similar in other commodities. On the international scene, GATT nego- tiations make farmers very worried. Our negotiators, in their haste to make Canadian agriculture appear as the shining example of non -subsidization with little government intervention, appear to be removing many of 94 THE RURAL VOICE our safety net programs before we know what the final rules will be. We see our government not putting a ceiling on beef imports as they may appear to be intervening with free trade in the world marketplace. The long-awaited revised crop insurance program is now supposed to be in effect for the 1990 crop year. We understand that some of these changes, such as spot cover- age, are only on a trial basis for 1990. And we feel that the changes in the program are basically only available if the farmer pays the increased costs such as the increased pre- mium for 90 per cent coverage. NOTE: THE BRUCE FEDERATION HAS PUR- CHASED OFA MEMBER SIGNS FOR ALL MEMBERS IN THE COUNTY. WE WOULD LIKE TO INSTALL SIGNS FOR ALL OUR MEMBERS BY THE END OF THE YEAR AND WILL BE CALLING ON YOU FOR THAT PURPOSE. IF YOU DO NOT WISH TO HAVE A SIGN AT YOUR FARM GATE, PLEASE NOTIFY OUR OFFICE SOON. PHONE 364-3050. There also appears to be a lack of infor- mation on the rural concessions as to what the exact changes will be and the costs for this year. We have no clear outline, for example, as to what spot coverage entails, whether it be field to field or farm to farm. In the area of farm financing, rising inter- est rates will have devastating effects on the agricultural economy. For every 1 per cent rise in interest rates there is a $200,000,000 increase in farm financing costs in Canada. The other half of the sword edge is that interest rates seem to be increased to prop up the Canadian dollar. A higher Canadian dollar cools down the export of Canadian agricultural products. With exports of $10.2 billion in 1988, it can be seen that the cur- rency rates can have a great effect. We there- fore see a need for a subsidization of interest rates for agricultural debt, which now stands at about $20 billion. We feel there is a place for longer-term mortgages and perhaps we should follow a Japanese program that has inter -generational mortgages. Similar pro- grams are available in Britain at rates more attractive than those of the banks. We see the continuation of rising interest rates as starting the decade off the same way that the eighties went. The farm community cannot and will not tolerate this carnage being inflicted on them again. The GST now appears to be inevitable. The reduction to 7 per cent from 9 per cent has not made it any more palatable to farm- ers. It is the opinion of our group that a lower rate of GST should be applied to ALL goods and services with NO exceptions, but with tax credits to those in our society low on the income scale — based on taxable income and not on an equity position. Our group believes that food should be taxed and that farmers will be looked upon as a special case if they are zero-rated on input costs. We would like to know if the Manufac- turers Sales Tax will be removed where applicable before a new GST rate is applied. We want to see a very simple form of GST which will not involve any further book- keeping time and costs to farmers. As well, we would like to see revenue generated by the GST on agricultural products designated to the agricultural budget because there is a definite lack of funding for agricultural re- search and financing. In another area of tax issues we would recommend the reinstatement of five-year averaging or a similar program. This would help the majority of farmers, especially those who have made financial deals such as write- downs and set -asides with creditors. We are experiencing cases where Revenue Canada is putting farmers in a serious financial posi- tion by taxing those settlements as income. We feel there is a need for restarting the ARDA program. With the FCC such a large landowner, it is imperative that this land be returned to farmers. The ARDA program would facilitate this transfer. It could also be used by existing farms and new farmers to better their odds of success in a farm career. To Agriculture Canada, we would like to direct some very pointed questions. It is our understanding that of the funds used from the restructure program of the Farm Debt Re- view Board, 60 per cent has gone towards administration. In this regard, we would like to see a public accounting. We also believe that the FDRB program has become very political, so that if a mem- ber speaks against the FCC his services are not required for further FDRB cases. The Growing Together paper compares rates of return of the TSE capital markets with farm capital at 7.5 per cent and 9.3 per cent respectively. From 1981 to 1987, farm capital was reduced 27 per cent or $31 bil- lion. When adjusted for inflation, the loss was $45 billion or40per cent. The figures in the Growing Together paper are not repre- sentative of conditions experienced in the 1980s leading into the 1990s. We wish to know where the figures for farm income come from. To use off -farm income and depreciation as part of farm income is misleading to the public and is a disservice to farmers. We would like to know if the tripartite programs are insolvent and, if so, what plans