The Guardian 9 February, 2005
Canada: Farm income sees "spectacular crash"
The federal government has estimated Canadian realised net farm income for 2003 at negative C$13 million — the lowest ever recorded. Realised net farm income from the markets alone, net of government payments, is almost negative C$5 billion.
"This is the most spectacular and damaging market failure in the history of Canadian agriculture", said National Farmers' Union President Stewart Wells, disputing the official explanation that the crash is caused by BSE, drought, and a rising Canadian dollar. On February 19, Wells sent a letter to all parties in Parliament to demand an emergency House of Commons debate on solutions to the crisis.
"Adjusted for inflation, farmers' gross revenues are at their third highest level in the past 20 years. Adjusted for inflation, our gross revenues are far above their 1990s levels", said Wells, noting that while a rising dollar reduced some commodity prices, those losses should have been at least partly offset by the dollar's effect in lowering some input costs.
Although cattle farmers faced low prices, and many held cattle back from markets, livestock receipts were not much below 1999, even when adjusted for inflation. Family farm cattle producers have been hard hit, said Wells, but "BSE and a C$2 billion drop in livestock receipts cannot explain realised net incomes from the markets alone of negative C$5 billion. This wreck is not just the result of a failure to produce, an inability to sell, or of currency fluctuations."
In his view, the net income wreck is the culmination of two decades of destructive government and corporate policies. "Our federal government pursued free trade, free market, and deregulation polices while our corporate buyers and suppliers were busy merging to increase their power and reduce their competition. While governments talked about free markets, farmers increasingly faced near monopolies. What did governments think would happen?"
The NFU president concluded, "The government took away our hog marketing agencies, cut the Crow, ended the two-price wheat program, deregulated grain handling and transportation, presided over the destruction of our co-ops, and tied their own hands with trade and investment agreements. At the same time, transnational corporations merged until there was often just three or four of them left controlling each link in the agri-food chain. These corporate and government policies pushed family farmers to the edge of a cliff. In 2003, we fell off."
People's Voice, Canada's communist newspaper