Feds focus spending of dwindling ag funding envelope on market expansion

Tuesday, March 25, 2014

by MATT MCINTOSH

The federal government projects Agriculture and Agri-Food Canada will spend more than $61 million more on its programs in 2014 to 2015 than it did in the previous year. However, the government department’s main estimates suggests there will be winners and losers among the different programs it funds, with initiatives related to on-farm conservation possibly taking a hit.

“It looks like the federal government is putting money into science and market expansion, which is good, but they are neglecting some other problems,” says David Sparling agri-food innovation chair for Western University’s Ivey business school. He notes that it appears like the money being applied to science and market expansion might be coming from environmental programming which has experienced several cuts.  

Released on Feb. 27, the most recent main estimates forecast how much the federal government expects to spend on each department in the current year. The updated data provided in the most recent main estimates report builds off of the finalized 2013-2014 estimates. Total expenditures for 2013-2014 are not yet listed in the government’s most recent main estimates.

According to those estimates, agricultural market development programming jumped more than $40 million to $155 million in 2013-2014 compared to the previous year. Cost estimates for science innovation and adoption remained around $300 million over both years.

However, the 2013 to 2014 cost estimate for On-Farm Action, a program designed to help farmers identify environmental opportunities and risks on their operation, plummeted 78 per cent to $27 million compared to the previous year.

The 2013 to 2014 main estimate for Environmental Knowledge, Technology, Information, and Measurement was also down to $35 million from $53 million in 2012-2013, and Agri-Business Development was slashed to $14 million from $51 million.

Christine Schmalz, senior environmental programs coordinator for the Ontario Soil and Crop Improvement Association, says the apparent reduction in funds allocated to environmental programs is hard to measure.

“The Environmental Farm Plan program is still fully accessible and hasn’t changed,” says Schmalz. “It’s hard to tell how the environmental cost-share program has been affected though. It used to be a stand-alone program but now it’s been combined under Growing Forward 2.”

Growing Forward 2 is a five-year $3 billon dollar federal investment designed, according the Agriculture and AgriFood Canada’s website, to improve Canadian agriculture’s ability to innovate and capitalize on new market opportunities. The Environmental Farm Plan program, and many others, operate under Growing Forward 2.

As a whole, the 2014 to 2015 main estimates for Agriculture Agri-Food Canada totals of $2.25 billion. Of that total, the government estimates it will spend $207 million to Growing Forward 2 and roughly $1.63 billion on business risk. It also plans to spend an additional $7.5 million on AgriRisk Initiatives, a Growing Forward 2 program that, according to Agriculture and Agri-Food Canada’s website as of March 21, provides up to $500,000 for research and development projects, and a total of $8 million per year to support the development of risk management tools.

Other programs that are expected to see large-scale reductions during 2014 to 2015 include:

• Canadian Wheat Board Transition Costs program, down $23.6 million;
• Advanced Payments program under the Agricultural Marketing Programs Act, down $28.1 million; and
• Agriculture Agri-Food Canada, down $63.5 million as initiatives wrap up under the Agricultural Flexibility Fund, which supports expanding markets, value-chain innovation and production costs to improve the agriculture sector’s environmental sustainability.

The main estimates report also say an additional $70.1 million is being subtracted from the agriculture ministry due to “recent saving initiatives.”

“The numbers are not surprising,” says Scott Ross, director of risk management and farm policy for the Canadian Federation of Agriculture. “They fit with the federal budgets that have come out over the last few years.”

Because main estimates are very general numbers, Ross says it is difficult to draw concrete conclusions on how programs and services will be affected at this point in time.

All updated estimates for Agriculture Agri-Food Canada, says the main estimates report, are designed to enhance the industry’s competiveness and expand international markets, as well as improve program delivery and engage the agricultural workforce to meet “current and future work objectives and opportunities.”

The report projects Agriculture and Agri-Food Canada operations and initiatives will cost about $2.25 billion in 2014 to 2015, which is about $1 billion less than those for a number of other government organizations such as Health and Veterans Affairs.

For further comparison, the Environment and Environmental Assessment Organization portfolios are projected to cost about $930 million and $31 million respectively. Topping the list with over $87 billion was Finance, while the Northern Pipeline Agency holds last place with $750,000. BF