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Government bailouts bypass livestock producers

Cattle and hog producers watching the growing list of industries slated for infusions of cash by the Canadian government must be wondering what they have to do to convince politicians their industry’s worth. In addition to promising aid to the Canadian auto and aerospace industries, Canada’s free enterprise government is now talking about assistance for the forestry and mining industries.

Livestock industries? Well, no. With the exception of Alberta throwing a whack of money at its cattle farmers, other provinces and the federal government appear ready to turn a blind eye to an industry sinking into the ground.

It’s interesting to compare the situation of livestock producers to that of autoworkers. The auto industry in Canada exists largely because of a trade agreement with the United States, known as the Auto Pact. It shifted some auto manufacturing from the U. S., where most of Canada’s cars were made, to Canada, mainly Ontar io. The pact required that for every car sold in Canada, one had to be built here.

The cattle and hog industries in Canada, with their present levels of production, exist largely because of the North American Free Trade Agreement. Prior to this, Canada’s beef industry was mostly sized to fit domestic needs and the hog industry was similarly small. When Canadian livestock were allowed into the U. S. tariff free, our production began to grow. That was further accelerated by poor grain prices in the 1980s and ’90s. Marginal lands were converted back to grass and feed grains were cheap.

Both industries are in huge trouble today, and the government is bailing one of them out. Guess which one?

So why do provincial and federal governments in Canada see the auto industry as worth saving and the livestock industry as so much waste to flush down the toilet? The answer may lie in location and politics. The auto industry in Eastern Canada means seats for any government that wants to rule or keep ruling.

Ontario voters will go Liberal, Conservative or even NDP at the drop of a hat (or a dollar). Western voters, particularly rural ones, vote Conservative no matter what. The federal government seems totally uninterested in agriculture, with the exception of dumping the Canadian Wheat Board. Equally, in Saskatchewan, the governing party seems assured of rural votes. In return, it is ignoring Saskatchewan’s large livestock sector.

Here’s the awful irony. When the Liberals ruled Canada from an eastern base, they ignored western agriculture. Commentators would of ten say we should not expect good treatment from a party we refuse to vote for. Now the party we vote for is in power, and we still get nothing because they expect we will always vote for them.

The same dichotomy seems to be playing out in Saskatchewan. The NDP was largely estranged from rural Saskatchewan during its long reign. Now the Saskatchewan Party, solidly entrenched in rural Saskatchewan, categorically says it has no help for the livestock industry. (And the Saskatchewan Stock Growers Association president Jack Hextall says, darn it…oh well… okay.)

The exception to this perverse rule is Alberta. The reigning Conservatives have doled out big bucks to the livestock sector to keep it afloat.

To compound the situation, it is unlikely that pouring money into this industry would do much good in the long run anyway. A recent study by the National Farmers Union shows that livestock returns, which were relatively constant for many decades, took a tumble with the advent of NAFTA and the consolidation of the packing industry. The example of calf prices illustrates this. Prices for 500-to 600-pound calves today are just over half their 1942 to 1989 average.

So, following the advice of governments and the economic dictates of the time, farmers increased livestock production and packers consolidated. When the system fails, as it has today, governments are quite prepared to dump the farmer. But then, that has been the way of thinking in government for a long time. Farmers are the problem, the solution is to get rid of more of them and leave only the efficient. It’s so much easier than challenging the conventional wisdom about business and trade.

Paul Beingessner farms and writes from his home near Truax, Sask.

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