Economist Don Drummond singled out Ontario's new risk management program (RMP) for comment in his report on why the Ontario government needs to cut spending and where savings might be achieved.
Drummond identified the weakness in the RMP as doing little or nothing to encourage farmers to improve. There are no incentives for innovation, improving efficiencies, adopting new technologies or improving management; there is only a cushion against declining revenues and he warns that could be extremely expensive.
He might have added that the program design leaves Canadian farmers open to international trade retaliation, especially from our biggest and most litigious customer, the United States. That is, of course, a risk that has been pointed out, ad nauseum, by federal Agriculture Minister Gerry Ritz.
When he was looking for savings in agriculture, he might have noted that farmers with supply-management quotas get to charge prices that cover costs plus providing a return on labour, risk and management. So why not cut them off from any additional subsidies or tax breaks?
Or, alternatively, if they get those subsidies and tax breaks, the government might consider forcing them to roll back prices by a comparable amount. That would have the benefit of improving their chances of survival when tariff protection begins to decline.
But, then again, farm policies are a simple, straight-forward reflection of the farm lobby, led by the Ontario Federation of Agriculture. And when, pray tell, has the OFA ever been hailed as a bright beacon of innovation, change and entrepreneurial excellence?
