Editor’s Take: Government support efforts are small change

It’s been an interesting week, from the editor’s chair, watching the stories related to agriculture policy come in.

One of the most interesting was from the Canadian Federation of Agriculture AGM, where that organization issued a clear call for greater understanding.

As Ottawa correspondent D.C. Fraser reports, CFA vice-president Chris van den Heuvel suggested that government seems to labour under the illusion that agriculture operates in a vacuum. It may consider the sector’s interests when considering topics explicitly within its realm, but often fails to consider the agricultural implications of broader policy, he said.

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There are, of course, few clearer examples than the lack of an exemption from the carbon tax on drying grain.

It’s a necessary activity that, while creating some greenhouse gas emissions, ensures that those already embedded into the production of the damp grain aren’t expended for naught.

It’s also a cost that there’s no way to recover from the marketplace. As farmers have lamented for decades, they’re price-takers, not price-makers. Global buyers don’t care if a farmer in Manitoba has to pay a carbon tax to dry that grain. Nor do they care that an Australian or American farmer doesn’t. Were Canadian grain growers to even raise the topic, which they won’t, the buyer’s response would probably be some variation of “sounds to me like you have a problem.”

One has to wonder just why the federal government seems so entrenched on this point. During a recent appearance at CropConnect 2020 in Winnipeg, federal Agriculture Minister Marie-Claude Bibeau echoed her by-now-familiar refrain that she needed “evidence” of the costs and demurred from making any but the vaguest promises of considering future action.

As one colleague noted at that event, it was such a “no-brainer” that this lack of action is puzzling. It would likely only amount to a few million dollars. KAP says Manitoba farmers spent an additional $1.7 million drying the 2019 crop, a pittance compared to the $2.6-billion carbon tax raised in 2019, and the expected $6.2 billion annually after full phase-in.

One program that Bibeau did tout during her scrum with reporters following her remarks was a $2-million program in partnership with the Alberta government to underwrite the cost of purchasing more modern and efficient grain-drying systems.

That’s not a bad idea, but it also raises another question: What in the world took so long for something like this to emerge? And why is the agriculture sector, in this case, a second-class citizen when it comes to such programming?

Consider the curious case of grocer Loblaws and its $12-million government-funded windfall to buy new fridges for its stores. This for a company with annual sales of over $11 billion and a 2018 profit of $221 million. That single, very profitable, company pocketed six times as much as all 40,600 census farms in Alberta combined.

Here in Manitoba, the newly minted Crown corporation Efficiency Manitoba is dispensing up to $300 per homeowner to buy more energy-efficient fridges, washers and dryers and even thermostats. It’s also giving out free LED bulbs to small businesses and covering up to 70 per cent of the cost of larger lighting-related upgrades.

The failure here doesn’t rest entirely at the door of the federal government. At least 50 cents of that buck stops down at the Legislative Building on Broadway.

Bibeau did correctly observe that the way agriculture programs are funded in Canada, an undertaking like the Alberta program must originate at the provincial level. Perhaps the Pallister government has been too busy grandstanding on this file and threatening, and then moving away from, legal action. Its “Made In Manitoba” carbon tax promised agricultural exemptions, but since signing on to the federal program it hasn’t been terribly proactive in trying to soften the blow for farmers.

Manitoba grain farmers already suffer from enough competitive disadvantages. They’re far from port position, they work in a frigid climate and they produce bulk commodities with low margins.

If the various levels of government want the sector to thrive, as they never tire of saying, they’re going to need to make sure they give it winning conditions.

A good start would be understanding the unique nature of this market, and how pains must be taken to ensure it remains globally competitive.

Grain producers should be, and are, striving to become more efficient. A program to help fund these efficiency advances would be a good start.

And an outright exemption on the carbon tax, at least for a phase-in period, also shouldn’t be out of the question.

About the author

Editor

Gord Gilmour

Gord Gilmour is Editor of the Manitoba Co-operator.

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