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The Rural Voice, 1996-04, Page 12EARLY BOOKING DISCOUNT ORDER BEFORE APRIL 30 WELLESLEY LOADING CHUTES CATTLE CHUTES ROUND BALE FEEDERS ,•- :rte, . - : LOADING CHUTE • Heavy Construction • 3 Pt. hitch (both sides) • Ramp settings 26" - 42" CHUTE CATTLE Ilimmil' Itellilliti, I I Il Willillimi; , ,, ,, , 7 , „....t,%is, i?I • Heavy Duty • 3 pt hitch (both sides) • Collapsible for shipping ROUND BALE FEEDERS ,11M14iliI....EMUM Mak .e ` 1j, `'�1 } +���•� tI P.r - a�R: AIR• LfMR •Tx8' • Feeds approx. 18 cattle • Holds 5' x 5' bales (and smaller) • 1 1/4" tubing • Heavy duty construction TILMAN SHERK R.R. #3 Wellesley, Ontario 519-656-3338 519-656-3429 evenings 8 THE RURAL VOICE r Robert Mercer The budget and more important stuff The March federal budget was not too tough on agriculture, though the Feds did what they said they would do many years ago — they killed the dairy subsidy. It will be gone by the year 2002. Effective August 1, 1997 there will be a five year phase- out of the subsidy and by 2002 the S159.6 million will all be gone. This is all part of the NAFTA/GATT approach to free trade and the overall reduction in subsidies to agriculture. The problem that remains is that in Canada there will be less subsidy so the difference will be made up in the market price of milk and milk products. On the other hand U.S. producers get subsidy through the back door and keep their milk prices low at the checkout counter. Thus U.S. prices will not rise as fast as they do in Canada and the "price discrepancy" at the retail counter will appear even greater than it has — especially for those Canadian cities on the U.S. border. As the consumer price difference rises the call for review of the supply management program will escalate with shriller voices and a more determined consumer advocacy. The question currently under review at the NAFTA panel on the U.S. challenge to our dairy and poultry tariffs will not be settled once and for all should Canada win. The battle will just shift ground from the legal field to the consumer field. The first meeting in the preliminary stage of the challenge was heard on March 12, and the ruling may not be made now until June '96. Although there were other areas of interest to agriculture in the budget (the sale of the grain hopper fleet) there was one smart move that deserves attention. Food inspection will be combined under a single agency. The new agency will oversee the quarantine programs as well as food inspection and will combine the activities in this arca from Agriculture Canada, Health Canada and Fisheries and Oceans. This is to me a case of putting consumers' (read taxpayers') concerns ahead of bureaucratic empire building and will thus save some S40 million of long overdue government downsizing. Another item that caught my eye last month was a headline that said in part "do not underestimate the potential for interest rates to fall to shockingly low levels over the next few years." As interest rates drive a significant book entry in farm accounts I wondered what reasoning there was for such a bold statement, a statement that is really of more concern than the Federal budget. The article was pointing out that the North American baby boom of the late '40s and '50s is winding down asset accumulation from houses, cars, furniture and family to wealth accumulation. Spenders are becoming savers. By pushing up demand in the '70s and '80s the baby boom created double-digit inflation and double-digit intcrest rates. The article suggested that what this demand did to housing and real estate in the '70s and '80s it is doing to financial asset prices now. Thus the currcnt bull market for stocks rather than houses. Grey hair is thinking in terms of retirement and financial ncst eggs, and the article said that this process was half way through its cycle. As money moves away from buying to storage (bonds, stocks, GIC's) there is more money available to lend and less demand to borrow. This means lower — shockingly lower — interest rates ahead.° Robert Mercer is the founding editor of the Broadwater Market Letter for which he continues to write market and ag-politica! commentary.