Budget disappoints tobacco growers

Wednesday, February 27, 2008

by BETTER FARMING STAFF

Tom McElhone said the board and its membership is “ very angry” and “disappointed” that a federal exit package for tobacco growers didn’t make it into the pages of the Conservatives’ 2008 federal budget.

“At least that’s an understatement of the whole situation, okay?” says McElhone.

He notes that federal Agriculture Minister Gerry Ritz had indicated several times — the latest one being two weeks ago – that the federal Conservatives planned to do “more for the tobacco industry than the Liberal government did over a 10-year period.”

Time’s running out for Ritz to make good on his promises, says McElhone, who notes growers typically prepare their greenhouses in March for the next season.

Eighty per cent of the board’s 1,559 tobacco quota holders won’t be producing tobacco this year. The crop size will be so small that the board’s auction system “no longer works,” he says.

“We need to have cooperation of these governments to accept the responsibility of the damages they have incurred and in turn support what needs to be done so the balance can carry on and try to have some production.”

McElhone says the board has asked Ritz for an emergency meeting.

So far, the federal government has rejected two industry-generated buy-out proposals for its remaining 271 million pounds of quota. Both were rejected for being too high, McElhone says.

For others in agriculture, there was little new to be found in yesterday’s budget that hadn’t already been mentioned in Ritz’s Feb. 25 pre-budget announcement.

However, there were a number of programs that will have an indirect, yet positive effect on agriculture, according to the Canadian Federation of Agriculture. Among these:

• the extension of capital cost allowance deductions for investment in equipment and machinery for manufacturing and processing for three years and expanding these deductions to cover machinery for renewable energy generation;
• the expansion of GST relief currently in place for lands leased for natural resource to lands leased for wind and solar energy generation; and
• investment into research and development of biofuels.

The budget is also calling for dedicating $113 million over two years to support a federal food and consumer safety action plan, providing $10 million over two years to research and analyze biofuels emissions and $21 million over the same time period to increase the effectiveness of environmental law enforcement.

In an analysis of the budget released today, the Conference Board of Canada observes that the budget features a large number of small expenditure measures “with monies doled out in dribs and drabs.” The analysis goes on to say that the amounts allocated to specific programs “are generally so small that the 2008 federal budget will, in fact, have little impact.” BF