The Hill: The travails of the Ontario farm economy

Thursday, June 10, 2010

With Ontario farm families surviving mainly on off-farm income, farmers are in a cranky mood, but the view from Ottawa is that lack of provincial support is to blame

by BARRY WILSON

By the numbers, the Ontario farm economy is one sick puppy.

Farm income projections prepared by Ottawa and approved by the provincial government predict that, this year, average net operating farm income will be just $22,484 per farm, one of the lowest levels in the country. That is down 40 per cent from 2008 levels.

On a provincial level and taking depreciation charges into account, realized net farm income in Canada's largest agricultural economy is projected to be a negative $457 million this year.

A farm economy that is predicted to produce crops and livestock worth $8.7 billion at the farm gate and receive more than half a billion in program payments is expected to lose almost half a billion dollars.

As is the case across the country, Ontario farm families this year will survive mainly on off-farm income. The farm income projection quietly released by Agriculture Canada in April says that the average Ontario farm will benefit from $85,127 in off-farm income this year, one of the highest levels in the country and 88 percent of total farm family income.

This is not a portrait of a healthy multi-billion dollar farm economy. It may account for some crankiness shown by farm witnesses when the House of Commons agriculture committee held hearings in Ontario in early May as part of a cross-country look at issues affecting young farmers.

At Ilderton and Wiarton hearings, a common theme was a complaint that Ontario farmers are facing unfair competition from farmers in other provinces. The reason, witnesses said, was that farmers in Quebec, Alberta and Saskatchewan benefit from provincial support programs not available in Ontario.

The biggest complaint was about the help the Quebec government offers its farmers through a producer-supported insurance program. At the Wiarton session, hog producer Leony Koelen said Quebec farmers benefit from rich supports while Ontario producers are "losing their shirts" and facing unfair competition from subsidized Quebec hogs.

"Other provinces should get rid of their risk management programs that cover production costs," she said. "It isn't fair."

Local beef producer Steve Eby said the federal government should step in to ensure that farmers in some provinces do not have unfair advantage over farmers elsewhere. "The federal government can show some leadership," he said.

Conservative Ontario MP and committee chair Larry Miller begged to differ. He said Ottawa has no ability to give money to producers in some provinces to offset the impact of provincial support in other provinces. All provinces must be treated equally.

Miller said the problem is that Ontario does not support its farmers as much as some other provinces do. "Unless the provinces back off from what they are doing, you will have this inequity," he told Eby. "The feds don't have a mandate to tell provinces to withdraw their support."

Later, he said that, as a cattle producer himself, he felt that he was at a competitive disadvantage to producers from provinces where governments supported the sector more.

And Miller said it was not a partisan shot at the current Liberal government, since agriculture has been underfunded through New Democratic Party, Conservative and Liberal provincial governments over the past two decades.

"It doesn't matter the colour of the government," he said. "Ontario has never supported agriculture properly." BF

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