Changes coming to the way Ag Canada views projected farm income

These may provide a clearer snapshot of the state of farming, but it could lead to a two-tier policy, with a form of welfare for the less successful

by BARRY WILSON

Proposals being developed by Agriculture Canada economists to change the way they make farm income projections each year could have a profound effect on how policy makers and, even the public, view the sector.

In some ways, it could put the cat among the pigeons in the contentious debate about who is a serious farmer and which farmers should be supported. And it could create a headache for farm groups who believe that public policy should not be designed to pick winners and losers in the farm community.

Pardon? A change in the way farm income projections are made could do all that?

Let’s back up for a moment.

On most days, it seems like a million miles from the Sir John Carling building in Ottawa, where Agriculture Canada economists dream their dreams, to Canada’s farms. A summer report from the House of Commons agriculture committee made the strong point that there is a disconnect between the agriculture department bureaucracy and a farming sector which they have rarely witnessed first-hand.

Within the upper levels of the Agriculture Canada bureaucracy, there is even an acknowledgement of that fact. There is a bit too much theory and much too little first-hand knowledge. Despite that, ideas generated and actions taken inside the department’s head office do often have a profound effect on the farm sector.

That gets us to changes being planned for the next farm income projection to be published by Agriculture Canada in early 2008. Typically, these projections take a broad view, projecting average farm incomes. Averages can hide a multitude of differences but can lead to policy debates about how to deal with low or negative farm income projections when some segments of the industry may actually be doing well.

Agriculture Canada hopes to remedy that next year when, among several changes planned, it will break down the projections by sector and by gross revenue level.

The department says that it will allow policy makers, farm leaders, lenders and input suppliers to have a better idea of which segments of the industry are prospering.

For the moment, farm groups including the Canadian Federation of Agriculture (CFA), support the proposed changes because they will offer a clearer snapshot of the state of the industry.

But there could be a downside for the CFA, which insists that agriculture policy should not be designed to support big farmers or farm operations perceived to be the best bets for commercial success. The federation argues that small farmers or low gross income operations can be vital parts of the industry and should not be written off.

But if the breakdown shows that farms with less than $100,000 in gross revenues have little hope of making a profit and farms with a certain level of investment have a better chance of being a successful business, will policy makers begin to tilt policy toward the more likely winners?

This could be setting the stage for two levels of policy development – serious business risk management for the farmers with a reasonable prospect of making a living and a form of welfare policy for the 150,000 or so designated “farmers” with a business plan or gross income that does not pencil out.

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