Farm leaders waiting to see how budget cuts play out

Agriculture Canada will have its $3-billion-a-year budget chopped by 10 per cent during the next few years — but details are scarce.

Both the Canadian Federation of Agriculture and Grain Growers of Canada said they wouldn’t judge the budget until they learned more about how the reductions will be implemented.

“Although on the surface the cuts look large, we are reserving judgment till we have more details regarding which programs will be trimmed,” said Richard Phillips, executive director of the Grains Council of Canada.

“Potentially, these widespread cuts may not touch critical areas. We will be looking for more detail where the cuts are coming from.”

One of the few specifics relating to agriculture in Finance Minister Jim Flaherty’s budget is that Agriculture Canada and the Canadian Food Inspection Agency will collaborate on research.

His organization will be watching to see if this move “will translate into more agriculture research and scientists on the ground,” said Phillips.

“Agriculture and Agri-Food Canada was one of 10 departments to see cuts in the double digits,” noted Ron Bonnett, president of the Canadian Federation of Agriculture.

While the federation supports moves to increase efficiency in the department, if “the cuts result in hampering the success of farmers’ businesses and rural communities, then this will be an area of concern we will address and will work with the government to identify solutions,” said Bonnett.

“We need to maintain a strong agricultural industry and support our producers to ensure Canada continues to compete successfully within a changing global economy.”

The Agriculture Department’s budget will be cut by nearly $15 million in the 2012-13 fiscal year and the CFIA will have to reduce spending by $2 million. Next year, the cuts will rise to $158.4 million and $56 million respectively and by the third year reach $253 million and $56.1 million. A government spokesman said the combined $2.6-billion budget allocation would become permanent, although annual funding would fluctuate depending on circumstances.

Money will have to be allocated later for Growing Forward 2, which is to come into effect next year, and other programs.

The department expects to save money by consolidating the delivery of grants and contribution programs and by streamlining management of the Farm Debt Mediation Service, according to budget documents.

The Canadian Grain Commission will also receive $44 million during the next two fiscal years while it transitions to a self-sustaining agency. The Conservative government tried to overhaul the commission when it was in a minority, but hasn’t acted on the issue since winning the 2011 election.

The budget also promised expanded rural high-speed Internet service through a spectrum auction in 2013 that will impose increased service requirements on successful bidders.

While the government will cut CFIA’s annual funding, it plans to allocate $51.2 million during the next two years “to strengthen Canada’s food safety system.”

A spokesman said the details on both the savings and the additional safety measures would come later. The new money would go toward completing the implementation of the food safety recommendations contained in the Weatherill report on the deadly listeria outbreak of 2008 — an effort that has already resulted in the hiring of hundreds of new inspectors and beefing up of other food safety operations.

Some farmers and food businesses might also benefit from accelerated writeoffs announced in the budget for equipment used for heat or electricity generation from farm, plant and wood waste as well as solar- and wind-powered equipment.

Despite a lot of talk in the budget about boosting research and innovation, there were no initiatives for increased agricultural research, said Bonnett.

And while tax breaks for renewable energy projects are welcome, the “CFA believes the tax support for clean energy generation needs to be expanded to include energy generated from animal waste, as well as plant residue,” he said.

Phillips said his organization is “optimistic about research funding remaining a high priority for Agriculture Canada.”

The Canola Council of Canada is also taking a wait-and-see approach.

“We think that the government is on the right track in terms of gaining increased market access and supporting more research — we hope these remain priorities after the budget cuts,” said council vice-president Jim  Everson.

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