Canadian Agricultural Business Risk Management Policy At a Crossroads

Can Ag Policy CrossroadsIn Ontario last week the cash price of corn reached $7 a bushel.   As a corn farmer, I can only remember that once before and it was fleeting in 2008.  So as I get ready to write Market Trends, my monthly take on Ontario corn prices for the Grain Farmers of Ontario, I’m assuming we’re 100% sold.  Interestingly enough that is not so, apparently there is still a lot of old crop corn left in southwestern Ontario.

I will leave that up to you to think about.  The point being we are seeing prices that are almost double what they were last summer.  Even though I’m paid to comment on these prices, I always take the tact that I don’t know what will happen.  I do that because I’m being honest, nobody knows what prices will do. I tried to summarize the different market factors and hope at the end of the day people will think a little bit more deeply about it.

With this as a backdrop I thought I would write this week about our agricultural policy world.  Earlier in my career, I’m sure most of you remember, I wrote about Canadian agricultural policy, almost every week.  I changed that focus, partly because marketing is so instrumental to my audience and on the same token agricultural policy is not.  However, still, there comes a time when agricultural policy trumps almost everything.  Sometimes there are moments in time where “something can be done”.  In 2011 as we all get set to make those planters roll, I’m afraid to say, this is one of those times.

Many of you have lost a pound of flesh fighting the Canadian agricultural policy wars.  I have certainly done that, having led farm rallies, protests and done my fair share of lobbying back in the day.  A couple of weeks ago the Ontario government made permanent the business risk management program developed by Ontario farmers as a way to stabilize farm income.  In fact they expanded it to other commodities versus the grains.  It was a benchmark achievement by Ontario agriculture, something that comes along about every 20 years.  The kicker of course is to make it truly stabilize farm income the federal government has to pay their fair share.  So the heat is on.

The Conservative government has said no, while the Liberal and NDP has said yes to Ontario RMP.  It just so happens that the Conservative government owes a large debt to rural Ontario for providing the seats, which helped defeat the previous Liberal administration.  That same government now is saying no to what got them elected in the first place. Politics is messy at the best of times as is this policy contradiction.

At the same time, the present government that promised to scrap the margin based CAIS program did not.  In fact the Agri-Stability program has turned into a tax.   It simply does not work and can almost be categorized as legal theft.  Needless to say, in our present elevated price level agricultural economic environment, no government will have any stabilization payments to make.

That’s why the time is now to push the agricultural economic/policy envelope to the limit.  The other reason of course is that there is a federal election on May 2nd.  If the Conservative party feels vulnerable, they may get onside to the business risk management policy in Ontario.  If they do not feel vulnerable, the same bad policy will persist and we as farmers will lose any opportunity to stabilize their incomes when the bad times come back, which they surely will.

Of course when you write about agricultural policy it is such a toxic soup.  For instance I often get messages sent to me by followers on Twitter from Western Canada who have little appreciation for the agricultural policy wars in eastern Canada. That is understandable as the three agricultural countries in Canada, Québec, Ontario and the West are so different.  Often these followers will ask me questions about some of these same policies for them, with the inevitable question about the Canadian Wheat Board.  Simply put, one Canadian agricultural policy for all makes no sense in this country.  Pretending it does, like the present Conservative government is testament to the fact their policy will not change unless they are staring defeat in the eye.

Do I think that is going to happen?  I dunno, I stay out of politics.  However, I do know that this election represents an opportunity to change Canadian agricultural policy forever, or at least until another political party comes along someday to screw it up again.  That’s happened before, when the Liberals actively destroyed GRIP, NISA and other programs which worked.  So as planters roll, there is much to consider leading up to May 2nd.  $7 corn is one thing, getting a consistent long-term agricultural safety net is another.  One of these days, we’re going to need it.  The time to ask for it is now.