Farmers Will Need More Support to Maximize The Rebound of the Agricultural Sector

Industry representatives and a federal opposition critic on agriculture issues say the government is missing an opportunity to use the agriculture and agri-food industry to drive Canada’s post-COVID-19 economic recovery by not prioritizing the sector

by Rachel Emmanuel – iPolitics

The comments come months into the global coronavirus pandemic which has devastated the agriculture sector, with dairy and egg farmers forced to toss products, livestock producers culling herds, and many farmers taking on debt while asking for more access to emergency federal funding outside of loans.

Chris van den Heuvel, the second vice-president of the Canadian Federation of Agriculture (CFA), said the agriculture sector is uniquely positioned to address the COVID-19-induced economic downturn as a national industry, but is awaiting help from the federal government to reach its full potential.

“With proper investments and concrete policy actions, the report said Canada could increase Canada’s annual agri-food exports by US$30 billion over the next five to ten years”

 

“We’re incredibly well-positioned, but we need a government to stand up and say ‘We’re going to make the investment in agriculture, we’re going to put it to the forefront,’” van den Heuvel said. “And that’s what we haven’t seen to date.”

According to Statistics Canada, the agriculture and agri-food manufacturing sector contributed $49 billion to Canada’s GDP in 2015, accounting for 2.6 per cent of total GDP.

Farm groups have long been calling on the government to address their needs amid the COVID-19 crises, with requests for more emergency funding, a call to fix Business Risk Management (BRM) programs which farmers have long complained don’t meet their needs, and a renewed request to axe the carbon tax for grain drying costs. In May, Prime Minister Justin Trudeau announced $252 million in federal support for the agriculture sector, less than 10 per cent of the $2.6 billion the CFA had said would be needed to respond to the pandemic.

Marilyn Braun-Pollon, the vice-president of Prairie and Agri-business at the Canadian Federation of Independent Business (CFIB), said the federal response has fallen short, pointing to a May survey by CFIB that found that only 29 per cent of farmers say the $252 million in federal emergency funding will be helpful for their business. The survey also found that 48 per cent of farmers are worried about debt and another 40 per cent of agri-business owners were worried the “new normal” will threaten the sustainability of their business.

Reiterating comments she made to the House agriculture committee last month, Braun-Pollon said farmers are looking to the feds for additional emergency relief, to improve BRM programs, exempt farming propane, nature gas, and aviation fuel used for farming activities from the carbon tax, reducing red tape on interprovincial restrictions, and focusing on trade and market access for all Canadian agri-food products.

“Much, much more needs to be done,” she said in an interview with iPolitics. “There’s lots of things that the government can, and the government should do.”

The COVID-19 crisis has created also created new demands, van den Heuvel said, adding that farmers have faced shortages of necessary personal protective equipment as well as labour – piling onto the already existing issues of needing to build on export and manufacturing capacity. He also said the government has yet to act meaningfully on the Dominic Barton report, released in February 2017 by the Advisory Council on Economic Growth, which found that Canada’s agri-food sector “has great potential” and could export up to $75 billion worth of products by 2025.

With proper investments and concrete policy actions, the report said Canada could increase Canada’s annual agri-food exports by US$30 billion over the next five to ten years, equivalent to nearly 2 percent of 2017’s GDP, and increase Canada’s share of global agricultural exports to 8 percent, from 5.7 percent to become the world’s second-largest agricultural exporter after the U.S. The report also pointed out that global demand for food products is expected to increase by 70 per cent by 2050, saying Canada must work to build its brand as a trusted source of food.

Jean-Sébastien Comeau, the press secretary for Agriculture Minister Marie-Claude Bibeau, said the government is working to make long-term, meaningful changes for the industry. He pointed to the $200 million for the Canadian Dairy Commission as a permanent change to address volatile market conditions, as well as the Farm Credit Canada’s increased lending capacity of $5 billion through Farm Credit Canada, saying “[It’s] here to stay.”

Comeau also said the federal government’s initial response was designed to keep people afloat through the pandemic, and now the attention will turn addressing specific sectors.

“For the agriculture sector, any of that will have to involve conversation with provinces,” he said, specifically noting that there’s ongoing conversations with provinces on BRM programs, which are a joint effort.

But Conservative MP and agriculture critic John Barlow said the government’s lack of concrete actions following the release of the report in 2017 will make it more difficult to act on now, pointing to the various ways the sector has been crippled by the pandemic.

“If you’re going into [the pandemic] injured, and you take some more hits, you’re going to be that much worse off,” he said.

For example, he pointed to farmers who were forced to cull herds when they were unable to get their product processed amid COVID-19 outbreaks that delayed meat processing operations, saying it will take livestock farmers a long time to rebuild their numbers. He said livestock productions still haven’t recovered after farmers cut production to respond to beef bans from Mexico and the U.S. when bovine spongiform encephalopathy (BSE), known commonly as mad cow disease, was found on a Canadian farm in 2003. Statistics Canada reports farm income fell to its lowest level in three years that year, due in part to the mad cow crisis.

Barlow also said Canada’s global reputation as a reliable place to do business has been eroded, pointing to the Wetʼsuwetʼen rail blockades and the CN rail strikes, which halted shipments across Canada, at a cost of about $63 million each week to grain producers, according to an estimate from the Western Grain Elevator Association.

Barlow said the government’s aspirational target reaching $75 billion in agri-food exports by 2025 is achievable only if the agriculture industry has the tools in place, noting that Canada should recover lost trade markets before it can look to increase capacity and expand to new markets. He said the Conservatives estimated that Canada lost $500 billion in trade due to the current Liberal government, notably canola to China, but also soybeans to India, and durum wheat to Italy.

“Most of those were political blunders that cost us those markets,” he said. “All of these things have added up.”