by SUSAN MANN
Ontario Federation of Agriculture president Mark Wales is challenging Don Drummond’s assertion the province’s Business Risk Management program doesn’t give farmers an incentive to increase efficiency or expand markets.
It’s clear from Drummond’s comments “he doesn’t understand how the program works,” Wales notes. “From our perspective the program does help drive innovation.”
Drummond, a former TD Bank chief economist, made the comment in his two-volume, 668-page report and recommendations to the Ontario government released this week on what it must do to balance its budget by 2018. If nothing is done, the report of the Commission on the Reform of Ontario’s Public Services says, Ontario’s deficit could increase from $16 billion this year to $30.2 billion by 2017-18.
There are 362 cost-cutting recommendations in the report on topics including higher hydro bills, larger school class sizes, fewer hospitals, user fees and cutting the full-day kindergarten program.
Wales says the permanent business risk management program was introduced last year for grains and oilseeds along with beef, veal, sheep, pork and edible horticulture producers. With farmers paying premiums and government paying part of the premium “we all share the responsibility and the cost.”
By instilling some stability at the farm level, the program gives farmers the confidence to plan ahead and enables them to plan to be more labour, fertilizer and fuel efficient, plus increase yields and productivity, Wales explains.
Drummond recommended the government review all business support programs not just the business risk management program in agriculture, and prioritize them with a view to supporting ones driving innovation and cutting ones that don’t.
Wales says the important thing is that the government realizes the program gives farmers the capacity to be innovative.
Lorne Small, Christian Farmers Federation of Ontario president, agrees with Drummond’s view that businesses the government supports should be accountable and it should ensure key objectives are met. But he’s surprised Drummond chose to talk about the most recently implemented agriculture program.
Small, who’s read 100 pages of the mammoth report so far and plans to read all of it, says his interpretation of the report is Drummond wasn’t targeting that program specifically but “using it as an example” for government to do better in the future.
Small says Drummond notes the government is bearing the risk under the program but farmers aren’t bearing much of it. There would be a big bill for the government to shoulder if there was a real hardship in agriculture.
As for the provincial agriculture ministry, Minister Ted McMeekin says by email that the government thanks the commission for its hard work though as Premier Dalton McGuinty has said the commission “will give us advice and we will make the decisions.”
Farm leaders say there were some positive elements to the report. Wales highlighted Drummond’s comments about regulatory reform.
Wales says Drummond introduced a new term – “jurisdictional crowding” – that he’s going to start using. The term refers to government ministries overlapping on the same activity and “we get that in agriculture quite a bit.”
Drummond’s regulatory reform comments tie in with the Ontario government’s open for business process to eliminate a lot of unnecessary regulation that just “makes it harder for farmers to farm,” Wales notes.
Small says there wasn’t a chapter on agriculture in the report instead the industry was included in with business. To look at agriculture as a business is healthy, he notes.
Ann Slater, Ontario coordinator for the National Farmers Union, a representative from the Ontario Cattlemen’s Association and Henry Van Ankum, chair of Grain Farmers of Ontario, couldn’t be reached for comment. BF
Comments
Any time any program, such as RMP, attempts to put a "base" under a market, it gets capitalized back into asset values, thereby creating higher costs, and by defintion, less efficiency.
It's one of the most basic principles of economics, and one which Drummond completely understands, but one which Wales, apparently, does not.
The debate is moot anyway - Livestock producers, after seeing this year's RMP premiums, are deciding to do what 50% of grain farmers originally entrolled in RMP have already done, and that's avoid RMP like the plague in the future.
Stephen Thompson, Clinton ON
How do we put the genie back in the bottle. Supply management farmers now have 27 % equity buying lang . now cash crop farmers think they should too. blamethis on baby boomer farmers. Where was all this advanced leadership training?????
The root of the problem is that farmers believe in the concept of "enshrined-exceptionalism" which means that they have historically demanded, and often obtained, favourable rules which don't apply to anyone else - for example, 200% tariff barriers protecting dairy and poultry farmers, special labour laws, special laws involving farm machinery on public roads, the ability to file income taxes on the cash system, property taxation exemptions, and so on, and so forth.
I seriously doubt even the so-called Advanced Agricultural Leadership Program delves into the problems created by this "we're farmers, the rules don't apply to us" concept at all, except possibly about how to perpetuate its existence.
Stephen Thompson, Clinton ON
(519) 482 - 3244
Agriculture was largely absent from the Drummond and I beleive for 2 reasons.
1. Drummond does not appear to understand the first thing about agriculture so he chose to stay away from the topic. That would indicate intelligence in decision making.
2. McGuinty ordered Drummond to prepare a report with defined parameters. Rural Ontario is very unhappy with McGuinty as he has shown nothing but disrepect to farmers for the past 9 years.
3. The Drummond report is nothing short of releasing trial ballons to watch public reactions. The government is under no obligation to implement any of the suggestions. The report is nothing short of a masterful marketing strategy.
Therefore I will make a prediction in regards to agriculture in the next budget.
McGuinty will cut the Rural support program in regards to farmland taxation. The province will implement a full rate of taxation on farmland as the public deems the 25% tax rate as a subsidy. The phase will start in 2013.
I believe they have made an assessment that farmers are in a position to pay more municipal taxes as reflected in land rental values coupled with high commodity prices.
The province will implement a full rate of taxation on farmland as the public deems the 25% tax rate as I HOPE NOT. dUMB ASSED GREEDY FARMERS HIGH RENTS HIGH LAND COST.
FARMERS HAVE BECOME STUPID hOW WILL WE STOP THIS TAX DEAL , FARMERS TOOK THE RENT BAIT
And who do you think will represent the farmer's case?
There is no leadership in agriculture. There has been no leadership in agriculture for a long time.
It was the OFA that proposed the 25% tax in 1996 and the government was more than happy to accept the recommendation.
The government did envision the consquences of such a move at the time but the farmers' groups insisted.
Let's see. With the Drummond report, will the government anger the teachers' union and the health care workers? NO.
Will the government step outside the Drummond report and anger 30,000 farmers? Yes and the public will give a sigh of relief.
Farmers have ZERO clout as they have ZERO leadership.
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