Frustration for Canadian farmers
Well, in most parts of the world, farmers are getting ready for another year -- but wait -- this is Canada, land of all talk and no support. In the last 12 years, agriculture has gone from an important industry that was thriving, to one that is on the brink of extinction. There are farm rallies happening throughout the country, but lately they have been starting in rural Ontario.
Let's look back at the last 12 years to try to get a handle on why we are in this predicament. A few years back, the federal and provincial governments came up with a new Agriculture Policy Framework agreement, which had five pillars and was full of hope and dreams -- our version of a farm bill. This was supposed to take the farmers of Canada into the new world of agriculture.
Well, what happened was MAD COW hit western Canada, and then the frosts of 2002 and 2004, and finally the total wreck in commodities prices in 2005.
The first two didn't affect the eastern areas of Canada, but low commodities prices and high input are now killing eastern Canadian farms.
It is just amazing that when one reads farm papers in Canada over the last three years, it's all doom and gloom. But when I look at the US farm papers, their ag sector is booming -- probably the best three years.
In our area, land values are sliding. If a person is forced to sell, they get creamed. Same with equipment sales. Land rentals in some areas of western Canada have landlord paying farmers to farm the land. In other areas $10 to $25 is common rent per acre.
The federal/provincial Crop Insurance program now has per-acre coverage of around $56.00 per acre, at a cost of over $6.00 per acre. The average farm operating costs are well over $50.00 per acre. So if there is a disaster in 2006, next year will be even worse than this year. But the advertisements on TV for this insurance make it sound like there is a program in place to deal with disasters -- this is so the city people feel the government is doing something for its citizens.
There is also a program called CAISP (Canadian Agriculture Income Support Program) or the (Canadian Accountants Income Support Program). It was designed to create an operating margin, and if you dropped below your margin, a payment was given. Well, let's say buying a lottery ticket gives you a better chance at some money than this program. It has made accounting firms wealthy because of the extra costs to farmers for filling in the forms for the program. Also some farmers have received decent cheques from this program, but in the next year will find them selves in an audit.
Basically, north-of-the-border farming has gotten to a point where most farmers are either going to try one more year or are quitting.
When you put pencil to paper, there is no profit for any grain crop grown in Canada.
Finally, most farmers have been promised something will happen for so long, that they don't even believe the politicians when a program is announced.
Yes, their are some farmers who are rolling in dough -- this is thanks to the oil boom that is happening in western Canada. One oil well with minerals can make you instantly wealthy.