LDP’s, Ontario’s RMP and the WTO Failure: Is It Time for Government to Move On?

In my part of Canada it is like a garden.  I’ve farmed for all my life, but rarely have I seen it as lush as it is this year.  There is still time for mother nature to exact her vengence.  However, on the rural concessions of southwestern Ontario, I’ve rarely seen corn and other crops look better.

Keep in mind I’m growing older.  All of us are.  I’ve recorded 200 bushel corn yield averages.  Now after the 2006 wheat harvest I know was 100 plus yields are like.  Memory sometimes fades.  However, in my fields and right across the American corn belt it would seem the crop is made.  Time is running out for the bulls to rush to the rescue.

We shall see.  There is still a little time left in this growing season.  Is a 12 billion bushel corn crop possible down south?  I doubt it, but things are really shaping up for a futures price spiral.  However, we don’t know the final story.  As former NBA star Bill Russell used to say, “that’s why they keep score.”

For Canadian farmers the spectre of a bigger grain glut has the effect of sending shudders down our spine.  What to do?  I know that there has been quite a debate in cyberspace over the last week with regard to my comparison last week between the LDP given to an American farmer, “Mr. Richardson” versus what we get here in Canada.  It would seem some of my readers don’t think our American friends and their LDP’s are the panacea I may have made them out to be.

It got me to thinking last week.  What are we really talking about here?  Are we talking about government providing farm income support or are we talking about government providing some type of farm revenue stabilization?  In the case of the proposed RMP program by Ontario farm groups can farmers really expect something like that soon?  Or will the safety net final solution resemble more of a “RMP-like” farm income support program which will not support the price of grain at elevated levels?  When the will the announcement come from government?  Or will it come at all?

Answer yourself this question.  How many times have you sold corn at $4.50 bushel in the last twenty years?  Honestly I cannot remember exactly but I know when I did sell it I felt good.  However, its been few and far between.  It is not often that we’ve had the opportunity to price corn at that level.  The proposed RMP gives producers an opportunity to pay premiums to lock in a price level of that amount similar to what is done in Quebec.  Is this realistic?  Is this tenable?  Does this make any agricultural sense.  Or would such support only capitalize that subsidy back into the farm economy raising the price of land and equipment?  And lastly, is this where we want to go?

Last week I told you I had my quibbles about RMP as proposed.  That really doesn’t matter as the RMP as proposed will probably not see the light of day as proposed.  With an Ontario election scheduled for October of 2007, the new RMP is coming.  It surely won’t be called that.  Politicians have to save face somehow.  Clearly though it will be cognicent of producer groups to nail down their numbers.  Government have proven they can screw something up royally.  However, they have all the power.  Ontario farm groups need to refine RMP and bring it up to speed.  That will not only foster understanding within the farm community but also raise credibility with government.

All of this is so very, very important as we enter the second half of the 2006 summer.  As you all know the recent WTO talks ended in failure.  That certainly didn’t surprise me.  Our American and European friends know what they want.  Listening to a Canadian position which redefines “hypocritical” was certainly not in the cards.  Now many countries are throwing up their hands in discuss.  Indian, a growing super power in that part of the world has said they are done with WTO.  They plan on going ahead with bi-lateral trade agreements.  How can you blame them.

So now as we enter August the Canadian boy scouts who have been flogging WTO seemingly forever should give it up too.  Yes, we are a trading nation, but agricultural negotiations are going nowhere.   It’s time for Canada to take care of its own farmers, disregarding WTO.  What credibility does that argument have about RMP and other agricultural policy having to be”WTO friendly”?  In 2006 that makes no sense anymore.  With new yield records growing in our fields, let’s hope our policy makers start to realize that.