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HomeMy WebLinkAboutHuron Expositor, 2000-11-29, Page 7TME MORON EXPOSITOR, November 29, 2000-7 Agriculture Ontario farmers fight uphill battle against U.S. and European subsidies By Carl Stavros• Clinton News -Record Staff There is a flood rising in the south and in its wake lies disaster for Huron County. farmers. For the past number of years, the United States government has been pouring U.S. greenbacks into' assistance for its agricultural producers. The effects of the policy have'spilled over onto Canadian farms and eroded market -balanced drop prices. "The World Trade Organization (WTO) told all .agricultural producing nations that suhsidies had to be eliminated (to restore balance incommodity prices). said Ontario Federation of Agriculture (OFA) Member Services Representative Paul Nairn. . "Still. the Americans (and Europeans) keep introducing new programs to help their farmers (at thc expense of Canadians)." In the global realm of agricultural market economics, all crop prices are determined at the Chicago stock exchange, Nairn explained. So how docs this factor spell doom for area farmers? - r• According .10 Wayne Hamilton. OFA director for Huron south. money given his U.S. and Europe counterparts, by • their respective governments has thrown oft balance the actual supply -versus -demand. commodity prices that is supposed to be dictated by the global economy. "U.S. and European farmers are receiving funds totalling approximately $70 (CDN) per. acre in assistance." said. Hamilton, a Stanley. Township farmer. • - As a'restilt, the U.S. and, European farmers can charge. $'70 less than Canadians and still maintain the same profit levels. For Canadian. and especially Ontarian farmers, thole profits arc simply lost. "On a typical 500 acre farm with mixed crop, for .: example wheat. soy beans and corn.. Canadian farmers arc short 535.000 in comparison Ito the U.S.)," he explained. Considering that this figure has been accumulating each year for the past three. income levels for Canadian agricultural. producers are $105.000 (CDN) lower than their American counterparts. As Nairn indicated, the roots of the low global commodity prices in Canada arc traced hack to a late 1990s round of World Trade Organization (WTO) talks and subsequent ruling that stated farm assistance programs need to be limited. ' "In the last round of trade talks. we were the boy scouts. Canada decided that we would do the right thing and cut support." Hamilton stated. ideal!'.. this trend. would have been followed by both the United States and the European Union (EU). But this has not been the case. In fact. "(they) are doing the opposite," • Hamilton stated. - United States Department of Agriculture (USDA) assistance levels are pushing the $5 billion limit imposed by the WTO. Canada, Hamilton added. is at a mere $1.1 billion. This year.. the levet has been increased to • approximately $2 billion. Through the, USDA Agricultural Market Transitions Act (AMTA), U.S. producers have available to them the, difference between previous and current commodity prices at the 100 per cent level. This program ensures that income for farmers remains static despite the fluctuation of commodity prices. "A recent statistic from the USDA said their farmers receive between 50 and 55 per cent of their net income in support from their government." Hamilton stated, highlighting the fact that there is no waiting period for them. In Canada, by the programs established for the agricultural industry. it still does not offer the s, nnort required for the 'tural industry in hard This fact disturbs and .res both farmers and .stry experts. "Even in 1996, support levels for both American and Canadian farmers were pretty close, about $20 per acre. But now, Ontario farmers are at $63 and Americans are at $123." Hamilton said. adding that the figures were translated into equal dollar ,amounts. As Broadfoot indicated. Doidge said that the federal government is not the only . one to blame. Provincial governments have the ability and authority to increase funding to assist their: farmers. Quebec has done so with the ASRA (Assurance Stabilization Revenue Act) . program which makes $112 per acre of assistance available to each farmer, based on the oil seed and grain crops. According to documentation supplied by Doidge, Ontario's agricultural industry is one- third larger than Quebec,: but receives 9.4 per cent of provincial agricultural Gross Domestic Product, whereas Quebec receives 19.6 per cent. Hamilton added that, "Quebec is investing at approximately two to three times as much money in .ASRA as Ontario is into MRI," which translates into a larger federal percentage contribution to Quehec fanners. In a study conducted on the difference between a 780 acre farm in. Quebec and Ontario, ' he stated governmental assistance has topped $580,000 in Quebec recent years. Ontario; for the -same acreage farm, has received less .that one - farmers have until recently had to wait to file their taxes to receive the financial support. Hamilton said in some cases, it would be 18 months later that •tt producers . would finally receive their cheques. Brian Doidge, professor at Ridgetown College and commodity prices expert, agrees that Canada is failing far behind other nations both in the profitability and support of the agriculture industry. The direct Zink between subsidy levels in the US and the commodity prices Canadians face have caused a severe imbalance in the marketplace so severe that, "Grainsand oil seeds, if adjusted for inflation, are at their lowest -.levels in 100 years." Canada does havea similar program to. the AMTA, the Market Revenue Insurance (MRI), program. But unlike its American equivalent,'Doidge said it .does not offer 100 per cent coverage for fluctuations in price and yield. -Not only that. but the averages used in the calculations are not based on long-term criteria and the farmers must shoulder a large portion of _ the payout balance. "We currently have (the MRi) which is based on 15 year averages, with Canadian farmers only receiving support of 85 per cent," he explained. And it is much further reduced before any cheques are delivered. . Hamilton state d that if he . were to apply to the MRI program, the primary program for supporting Canadian and Ontarian. farmers, the funding would be • calculated as follows: (target price) x (movingaverage yield) — one-third premium = total amount paid out.. Target price is defined as 85 per cent of. five year. moving average Of crop prices while the moving average yield is comprised of 80 to 90 per cent of guaranteed production yield. The premium. said Hamilton, is the 33 -per -cent portion that the agricultural producer is required to pay according to the program. After a few calculations, overall governmental support hovers around the 57 per cent mark of the actual moving average price. In the United '`States. as stated above,. support is 100 per cent of the target price. The . Net Income Stabalization Account (NISA)'is another option availableto assist Canadian farmers through hard times. However, the program is based on a farmer's ability to make contributions to thc account, wbich are matched dollar -per -dollar by thc federal government. This logic is also being questioned by the farming community. "Basically with NISA, you have to have money to use the program," said - Bill Steenstra, Pioneer Feed dealer representative in Huron County. The chips are especially , stacked against young farmers who have not been in farming long enough to build up an account that will be of any assistance, he added. The Federal -Provincial Crop insurance Program (FCIP) has also been established to defer any financial loss incurred by price levels for ci6ps. if the commodity price falls below the established figure, the program will make up,the difference and give it to the farmer. However, Clinton area farmer Marilyn Broadfoot stated that the program has been quite ineffective since the federal and provincial governments have squabbled over the payments, nullifying any potential benefits to the farmers of Canada. Regardless of the potential and actual benefits realized seventhtthat of ,Quebec. a mere $75,000. Several times. Hamilton repeated the need to achieve .fairness in the market -place. which is crucial to the survival and viability of agriculture. • the second largest industry in the province. The numbers game can be hatted hack and forth endlessly in the debate in the Ontario -United . States. Ontario-Quehec agricultural playing fields. Either way. the Ontario farmer is lighting an uphill battle. The solution. said Doidge. can take the form of two opposing means to achieve the same enc.... Force the Americans and the European Union to reduce their. suhsidies or increase . those to Canadian and Ontarian Partners. • "We. are asking for equality with the U.S. It' we are going to have an open See AGRICULTURE, Page 12 Because their first words are so important! Huron -Perth Pre-school Speech/Language Initiative SmaIITALK is a free service provided by local health agencies. If you're concerned about the way your child talks, please call - 273-2222 or 1-800-269-3683 for information or a speech assessment ARE YOU EXPERIENCING LANDLORD OR TENANT PROBLEMS? - * Is someone in violation of their duties? * Are you having difficulties collecting rent? * 1s your unit not up to health & building code standards? * Do you have questions in regards to any landlord tenant matters? - COME SEE THE EXPERTS AT: Van Pelt 24 Ontario Rd. Paralegal 348-4731 Quaint Shops Delectable' tRestaurants Char;i iiiCg Accomnscdati01 Victorian Warmth ED,•6,e-mmq".0 g ally SABIES Commemorate the newest family member. Join The Huron Expositor's "Babies on Parade" �. A Photo Display of Babies born in 2000. Published Wed. Jan. 3, 2001 Send or bring a picture of your little one born in 2000, including full name, birth date and parents' names, to be featured in The Huron Expositor's 'Babies on Parade" on January 3, 2001 for only $15.00 (GST included). Please send picture (with name on back) along with a cheque to The Huron Expositor, P.O. Box 69, Seaforth, Ont., NOK IWO by 2:00 p.m., Thurs., Dec. 30th. Photos may be picked up after January 3. This must be pre -paid; SAMPLE • Please Complete. • - Baby's Full Name Birth Date Parents' Names $15.00 Enclosed ❑ CIII\ • >it1�i f %/60, NAME OF BABY DATE OF BIRTH PARENTS lk DEADLINE - DECEMBER 27th, 12:00 Noon The Huron Expositor 11 Main St., Seaforth 527-0240 E=:a•clt.P.4)