REPORT FROM MEETING WITH NATIONAL FARMERS UNION MEMBERS

Background

Since the mid 1970s the realized net income of Canadian farms have fallen consistently. The farm crisis that dominated headlines a few months ago may have been triggered by environmental conditions but statistical information clearly indicates it is part of an ongoing trend that has seen net income per farm (in 1998 $) fall from $50,000 in 1975 to -$2,000 in 1999. Clearly this is part of an ongoing trend that the AFB must address in dramatic fashion lest we see the complete annihilation of the Canadian family farm and with it, the rural communities on which much of Canada was built.

Delegates of the National Farmers Union convention identified several key reasons why the family farm is in jeopardy. First, the dominance of large, mainly foreign corporate farming operations has led to the amalgamation of many smaller farms and destruction of the economic base by which rural communities are sustained. Second, the cost of farm inputs have increased dramatically, with many farmers held hostage by the ever increasing price of fertilizers, herbicides and seeds. Finally, the near complete removal of subsidies like the Crow's Nest agreement have tripled the cost of crop transportation in just five years, enacting a horrible toll that only the largest corporate farms can possible weather if left unabated for much longer.

Delegates of the NFU did not agree with the official government stance that dropping farm incomes were the result of an oversupply of produce caused by excessive subsidies paid to American and European farmers. They said that this tendency to blame farmers is an easy out for governments. Now that Canadian farmers have done everything the government has ordered (expand, diversify and purchase the latest technology) all without the slightest increase in income, the government has simply shifted the bogeyman over seas and attempted to make all farm problems the result of European subsidies. This scapegoating ignores that the cost of inputs in Europe is as much as 25 times higher than it is in Canada, thus making subsidy a completely necessary part of agriculture. Likewise, farmers did not believe that increased trade would in any way help their situation, pointing to figures that showed farm exports to have increased from $2 million in 1970 to $22 million in 1998, with less than a $1 million increase in realized net farm income during the same period.

Clearly the family farm and the rural farming community are on the edge of extinction. Cynicism prevailed when delegates began to discuss possible solutions, with a general feeling that even the battle for control of their own cooperatives had been lost. Yet despite the despair, all delegates agreed that the family farm was not only an important part of the Canadian economy, and just as importantly, an cornerstone component of Canadian culture. Moreover, the loss of the family farm means the effective loss of sovereignty over food - an issue that all farmers believed should at least be on the level of concern that loss of cultural sovereignty now enjoys.

The NFU delegates were quite rightly cynical about their future. They did however identify some issues which they believed the AFB could make a stronger stand on.

Subsidies

Farmer made it clear that they did not believe that the U.S. or the European Union would remove the subsidies it has in place for its farmers. More importantly, they believed that even if they did, the problems they face would not be solved. The fact remains that corporate farming operations are the only ones who can survive over the long term in a subsidy free environment. In fact, many delegates went so far as to see the removal of subsidies as a quick and easy way for corporate farms to bleed the family farm dry and swallow up the remains at an incredibly low price. They point to the hog farming industry in Manitoba where the drop in hog prices coupled with highly inadequate subsidies forced almost every last family hog-farm out of business. While appreciative of farm aid, all farmers agreed that such reactionary programs are not enough, and that a full return to subsidy levels are the only way to save the family farm. To this end, the recommended a reinstatement of productivity gain sharing which would mean a $/tonne decrease in freight rates, along with a reversal of the subsidies like the crow's nest agreement which were cut in recent years.

As mentioned before, NFU delegates did not believe that America or the European union would remove subsidies, nor did they believe this option would result in any gains for them even if Canada was successful in removing subsidies of competitors through the WTO. Making matters worse is the fact that inspection fees have increased dramatically over recent years, further raising the cost of distribution of products. Faced with these realities, cuts to subsidies for farmers should be viewed as a failed experiment that have allowed only large, mainly foreign farming corporations to survive, while gutting the family farm. Reinstatement of subsidies and lowering of inspection fees are the only viable ways to protect the remaining small and medium sized farming operation in Canada.

Prices

Delegates of the NFU convention have noticed a disturbing trend in the last few years: amount paid to the producer has consistently dropped while the amount paid by the consumer has risen dramatically. In order to begin to remedy this problem, two things must be done. First, there needs to be an expansion of supply management and marketing programs. This will ensure that the right amount of each product is produced and that consumer demand is more focused on meeting the anticipated supply and creating a demand for products when overproduction occurs. Just as importantly there needs to be a full inquiry into the profit distribution in the agrifood chain - from the outlets who sell the food to the distributors and through to the farmers (especially larger operations). Farmers worry that the price distributors and sellers pay for their product is being artificially depressed, while the cost paid by consumers is being set above a fair market value. As an interim measure, they also suggest labeling of staple products to show what amount of the sticker price is paid to the individual farmer (this has been done in some European countries, allowing consumers who wish to support farmers to make their purchased based not only on actual price, but also the amount of funds that the producer will receive).

Removal of the Capitol Gains Tax

Farmers have urged the AFB committee to revisit their proposed removal of the $500,000 capitol gains tax. While they understand the rationale behind the tax's removal, they also know that the removal of this tax would be an active discouragement of family farming because lacking formal pensions and living on a year to year basis, the land acts most farmers retirement income.

The Farm Crisis

While farmers recognized that their current crisis was largely a result of a decade of unprogressive farm policies coupled with excessive gouging from large corporate farming interests, they were adamant about he need for an immediate bailout package. This package would address the worse of the crisis, helping farmers address both the debts that have accumulated over the last few years and the enormous losses resulting from being unable to

seed much of their land this year because of environmental problems (excessive water on the ground). Farmers need between $1.3 billion and $2 billion in their hands before spring seeding if they are able to meet the bare minimum of the debts experienced over the last few years. Failure to provide these funds could force thousands of farms sell to large corporate operations, which would not only mean a decrease in Canada's food sovereignly, but also a dramatic economic loss for rural communities that rely on spinoffs from small and medium farms for much of their employment.

Organic Farming

Organic farming was proposed as a solution to many of the problems facing farmers. The reason for this stems largely from the highly personal relationship a farmer must have with his or her land in order to farm organically. Unlike present day farming, where the use of herbicides and chemical fertilizers can render a fairly uniform crop from virtually any land, organic farming demands that a farmer know his field well and be able to attend for different sections of it with varying forms of care. This forms a structural barrier to the insurgence of corporate farms (which, by their nature, would have a very difficult time treating land with the care needed to farm organically). The other chief benefit of organic farming is that the cost of running a farm is reduced by about $40 - $60 per acre (which, based on anecdotal evidence of NFU members, is the average cost of using chemical fertilizers and herbicides) and while yields are reduced (especially during transition years), almost all the money earned from the sale of crops is money in the farmers pocket.

Based on this evidence, and the public health benefits of organic farming, it seems reasonable for the AFB to more actively promote the use of organic farming. Asides from giving farmers the funds and knowledge needed to transfer over to this form of farming, the government would also need to invest money in organic food marketing in order to make organic farms viable (as it presently stands, most organic food is sold at somewhat inflated prices to a special market). If mass consumption of organic foods and the resulting benefits are to become the norm, the average citizen must be able to identify organic produce and also be knowledgeable of the benefits of organic foods. The AFB could help ensure these results by helping foster organic food cooperatives (both in production and marketing) and by providing the funds needed to get a mandatory producing labeling program off the ground.

Low Chemical Farming

While organic farming has many benefits, NFU members also agreed that it is not always feasible or practical. Some members had adopted for low chemical farming, which utilized minimal amounts of herbicide and fertilizers. Generally, the costs of these forms of farming ranged from $5 to $10 per acre (compared to the aforementioned $40-60 per acre for present day farming practices). This sort of farming dramatically reduced costs, while keeping yield relatively high, thereby helping spare family farming while leaving money to be invested in rural communities. Given these benefits, the AFB would also be wise to commit funds to supporting the creation of more low-chemical farms.