Agriculture's case for a share of the infrastructure pie

Friday, April 8, 2016

Investing in the farm/food sector and providing more cash for farm business risk management programs are two ways that the federal government can help realize its own economic goals

by BARRY WILSON

When Canadian Federation of Agriculture president Ron Bonnett found himself face-to-face with recently elected Prime Minister Justin Trudeau at a reception last winter, he didn't pass up the chance to make a point.

"I told him 'an investment in agriculture would help solve your problems'," Bonnett told the late February CFA annual meeting in Ottawa. Later in an interview, he elaborated: "I wanted to get across to him the idea that, of all the sectors, agriculture has the most potential to grow and farmers tend to react to better circumstances by investing."

There is no doubt Trudeau has a major economic problem on his hands – many of them, actually. Growth in the economy is largely stalled, low resource prices are dragging down investment, job numbers and confidence, and large government deficits are looming.

In fact, like his father Pierre – the country's 15th prime minister– Justin (the 23rd) sees federal deficit spending as a major part of the solution to economic stagnation rather than part of the problem.

He is promising billions of dollars in infrastructure and stimulus spending with estimates of the 2016-17 federal deficit soaring as high as $30 billion or more. As Bonnett sees it, this literally is a golden opportunity for agriculture. The government wants to spend to create jobs and growth.

The job of agriculture leaders is to convince this largely urban government that rural and farming Canada would be a wise place to put some of those stimulus bucks.

In no particular order of preference, a farm/food sector destination for some of that $10-$20 billion pot could be put to good advantage in areas such as:

Investing more in science and research and, in particular, the longer-range "what-if?" research projects which produce the breakthroughs that have helped make the agriculture and food industry Canada's largest manufacturing sector and a huge earner of export revenues;

Finding ways to help the food processing industry that has been hit hard in recent years, particularly in Ontario. Money for innovation could be part of the solution but more sensible labour and employment insurance policies also would help;

Investing in rural infrastructure, including better high speed Internet service, transportation links and rural municipal services, would boost the rural economy, help keep populations stable and help create jobs.

These are some of the ideas being kicked around when rural policy wonks and activists get together to dream about their share of this enormous federal pie.

But perhaps one of the greatest opportunities for agriculture is the fact that this free-spending government period coincides with intensifying negotiations over the next generation of farm business risk management programs.

The next Agriculture Policy Framework, which will take effect in 2018, will be negotiated over the next two years and more cash on the table would be an enormous boost to the effectiveness and the credibility of the programs, particularly AgriStability and AgriInvest.

Both programs saw significant cuts in support levels when the current terms took effect in 2013. CFA delegates at their Ottawa meeting argued the result has been decreased farmer participation and faith in the programs, and therefore greater financial risk in the sector.

A CFA working group is calling for a reversal of the 2013 cuts and other improvements. Of course, the programs are cost-shared and not many provinces have the resources to deficit-spend their way out of trouble, so federal-provincial negotiations could be prickly.

But these turbulent times offer agricultural leaders a real chance to make the pitch for a greater share of government investment.

"We've got to start now to paint the picture that we will be a growth industry in the future and it should not be seen as a subsidy but an investment," said Bonnett. "It is our chance." BF

Barry Wilson is a member of the Parliamentary Press Gallery specializing in agriculture.