Canadian Government Leaves Door Open For More Covid 19 Assistance

Corn planting started and finished for me this week. The soils in SW Ontario are dryer and in better shape than anything I had last year. In fact, in 2019, I hardly planted a “fit acre”. It was so different this week with wide open skies and the dust blowing. The only thing that was missing was warm temperatures. In fact, temperatures below freezing temperatures and snow flurries predicted for tomorrow. It’s just as well my soybeans are still in the seed tender.

Amid the full court press of getting my corn in, I continued to get to listen to Prime Minister Trudeau and Premier Doug Ford give their Covid19 updates over the tractor radio. This past week I got news over Twitter that an agricultural funding announcement would be made. That’s exactly what we got as Mr. Trudeau made the special agricultural announcement during his Covid presser last Tuesday.

The Prime Minister announced a $252 million package intended to help the agricultural and food industry during the Covid19 pandemic. $77 million was earmarked to food processors to retrofit their workplaces and increase their capacity to deal with the backlog of livestock across the country. This money would be used for PPE for workers in the meat processing plants as well as help in keeping it all under a social distancing umbrella. Simply put, working in food processing is an extremely dangerous thing these days and that money is intended to alleviate some of that.

It is no secret that the livestock industry is really taking a hit from this Covid19 pandemic. The Prime Minister also announced adding $125 million to its Agri Recovery Fund, which is aimed to help those livestock producers who have to keep animals longer. Extended stays in feedlots are expensive. I don’t know how this will work, but the intention seems to be in the right place. However, as I write this, lots of pigs are being culled across North America.

It’s a rough time for sure, but now we are seeing the ugly side of agricultural economics. Both cattle and pork farmers are seeing very low prices for what they produce, if they can ship. At the same time beef in the grocery store in getting higher. The disparity shows just how ugly this dichotomy can be. Supply is stifled at the farm, but demand is not on the retail side. Grocery stores are simply taking advantage of the situation thru their oligopolistic market behaviour. There is nothing illegal here, but its ugly agricultural economics. Farmers are left holding the bag.

The final $50 million announced was for a purchase program mainly centred on potatoes but may include poultry. Instead of food being thrown out the government is hoping to re-direct and redistribute this surplus to food banks. In addition to this, the government wants to expand the Canadian Dairy Commission Act to allow it to purchase and store more surplus dairy products, such as cheese and butter. This had been requested by the Dairy Farmers of Canada and was seen as instrumental in managing bottlenecks in the dairy supply chain caused by Covid 19.

I was not surprised by the announcement partly because I’ve become numb to the lack of support for Canadian agriculture over so many past administrations, but also because of Covid19. The pandemic has changed in such an unusual way regarding the supply chain, I was expecting something to address that specifically. That’s essentially what we got. However, as you all know I’ve got major views of how I’d shape agricultural policy. There was none of that. In fact, the Canadian Federation of Agriculture had called for $2.6 billion worth of agricultural support. They said the announcement fell “well short” of what was needed.

It is what it is. Obviously, social media lit up with criticism of Canadian agriculture being denied yet again more funding. It was especially galling to many who considered other sectors of the economy were getting more help vs agriculture and food. Needless to say, the Prime Minister left the door open for further support. The Conservative opposition among other things said, the Liberals were sprinkling water on a burning farmhouse.

In fact, it is a burning house. However, there are lots of burning houses in Canada these days. Think of the number of people lining up for government assistance? It is huge as Covid19 has completely changed the game. Despite that, I tend to believe there will be additional funding announcements to come. Sure, I’m numb to the pain, but to me, there was too much missed here and I’m willing to cut the Prime Minister some slack. As we move ahead into the Covid19 summer, there will be more changes that will need to be made.

Of course, we’re hoping to get past this. However, that seems to be turning into a monumental task. The priority is to stay healthy during this difficult time. Wouldn’t a grain rally be good for morale? I think so too. That black swan can’t come soon enough.