David Sparling, chicken farmer turned business professor at
the University of Western Ontario, says the federal and provincial governments
should cut spending on income risk management and boost it for research,
development, innovation and marketing.
He and student Nicoleta Uzea of the Richard Ivey School of
Business note that last year, which was generally good for Canadian farmers,
the governments spent $2.5 billion on subsidies for farmers and only $275
million on research.
Their report came out just as the federal, provincial and territorial ministers of agriculture were announcing their new five-year program which, they said in their news release, boosts spending on innovation.
But it also includes continuation of direct farmer subsidies and allows provinces more flexibility, which might mean that Ontario will be able to put some federal money into its business risk management programs pegged to the cost of production for grains and livestock producers and self-directed risk management for horticulture farmers.
Sparling and Uzea say the direct subsidy money does little or nothing to improve
efficiency and competitiveness, nor will it open profitable markets around the
world.
Ron Bonnett, president of the Canadian Federation of
Agriculture, agrees in general, but also noted that hog farmers desperately need
government help this year and next.
Sparling offers AgriInvest as a program the governments
could cut. They put $425 million into matching farmer contributions which can
go as high as $22,500 a year. In 2010, the governments’ contribution was 90
million less.
It’s a
completely universal program with no caps on the entire allotment, other than
the farmers’ annual maximum. There are farmers making millions and worth
millions and still receiving the government matching contribution but they don’t
really need it, Sparling says, adding that’s not the best use of government
funds.
Bonnett said some of the AgriInvest money ought to be available to farmers to innovate.
“Now when
things are really good there’s an opportunity to move some of the money out of
farm income supports and really invest in things that will make a difference,” Sparling said.
