Strahl Off to Rough Start As Agriculture Minister

On February 14th before a throng of 1500 farmers your loyal scribe took the stage in Guelph Ontario. The week after I did the same thing in Ottawa. It was another attempt by local farmers to strengthen the farm agenda. To get that many farmers to Guelph and Ottawa on a couple of cold damp days in February was a great feat. The measurement is much stronger than it looks, because the farmers who were there came by themselves.

It was quite a day in Guelph, partly because of the Ontario agriculture minister Leona Dombrowsky. She showed chutzpah getting up in front of farmers. She was first on the agenda; partly because she was meeting with federal agriculture minister Chuck Strahl later that day.

Some of you might think I’m looking at that with rose-coloured glasses. Yes, I agree the Ontario provincial government needs to step up like Quebec has. However, I’m not so sure as I was a few weeks ago if there will be any movement. Making those final steps is always the harder part.

Unfortunately, the air was completely let out of the balloon later that day. New federal agriculture minister Chuck Strahl dropped the ball and dropped the ball hard. This is what he said according to Reuters News.

“We’re convinced that we need to make changes to separate the support systems from disaster relief, make it easier to administer (CAIS), easier to figure out and easier to access,” Strahl told Reuters.
He was misquoted. He said the same types of things in Ottawa after I left the stage. He mused about how the new Conservative government wants to make the CAIS program more user-friendly.

That is the kiss of death in farm country. On rural concessions there was the air of disbelief. The Conservatives will easily lose ten rural seats if the Conservatives maintain any semblance of CAIS. I think they know that. This latest agriculture misstep was a doozy.

I’ll let you guys carry that ball for now. For me, the issue is not necessarily money, money, money, but safety net, safety net, safety net. To me, a strong Canadian farm economy is all about strong agricultural economics. If we have our agricultural economics right, everything else will fall into place.

It is an old story, and one I’ve told many times. Agricultural economics is different than the mainstream world of economics. One reason the genre is treated differently in academia is because farm economics don’t work in conjunction with the natural laws of economics. Understanding that is key to knowing why a long-term consistent agricultural stabilization policy is essential for Canadian agriculture.

I’ve said it many times. Agricultural economics is a mixture of economic rules and the flow of money and biology. In the farm fields and barns of North America farmers cannot cut off the flow of supply when prices go awry like the automakers or widget makers of the world. In a nutshell that’s called inelasticity of demand. It’s the Achilles’ heal of the economics behind agriculture. It’s our biggest problem.

I bring this up because it is often lost in the debate. It is not only lost on bureaucrats and politicians, but regrettably by farmers themselves. Attacking this problem is our best way to evolving with the changing agricultural environment we are in.

Governments have done that in the past by subsidizing agriculture through stabilization policies. The best at it are our American friends. There agriculture is so big, their producers have traditionally been the victims of their own ingenuity and efficiency. So we have the American system to stabilize farm revenues.

As many of you know our Canadian government has tried too. Crop insurance, revenue insurance and supply management have been a part of our greater Canadian agricultural stabilization policy for many years. However, when the Liberal Chretien government took away Market Revenue Insurance across Canada, income stabilization was done. Farmers were left to the gods of inelastic demand. Prices went south. The rest is history.

That’s Prime Minister Stephen Harper’s greatest agricultural and political challenge. How does he put back together an agricultural safety net policy, which will stabilize and support Canadian farm revenues? Politically he can’t afford to ignore his rural support. They got him elected.

This is not an easy challenge. Nothing is going to change in the US, Europe or Brazil. So Stephen Harper has some choices to make. Letting Canadian farm country out to pasture shouldn’t be one of them.