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Looking North for new answers to old problems
By Alan Guebert
Farm and Food File
On any other day, the Jan. 23 confirmation that another BSE-carrying cow had been discovered in Canada would have rocked that nation and its Canadian beef-importing neighbor to the south.

But Jan. 23 wasn’t any other day; it was Election Day in Canada and by nightfall the mad cow had taken backseat to the emerging news that the Conservative Party - a party that didn’t even exist until 2003 - had captured Parliament after nearly 13 years of Liberal reign.

The mild upset, which anointed 46-year-old Conservative leader Stephen Harper Prime Minister, became an even bigger story the next day when vote totals showed Conservative candidates sweeping nearly every riding, or district, in Canada’s farming and ranching provinces.

Indeed, from Ontario in the east to British Columbia in the west, the rural breadbasket of Canada delivered 105 of the 124 seats Conservatives claimed in the House of Commons. Liberals pocketed just 68 in the same provinces.

Clearly, farmers and ranchers voted for change and, just as clearly, they need it. Battered by BSE, bad weather and sagging commodity prices, Canadian farmers have been bleeding red ink for years.

For example, after Canada’s first Mad Cow incident in 2003, net cash income nationwide (all in U.S. dollars) dropped to $3.7 billion from $6 billion in 2002. Worse, realized net income (net cash income minus depreciation and income-in-kind) vanished, falling from $2.25 billion in 2002 to negative $11 million in 2003.

Government responded with emergency income programs. In 2004, net cash income rebounded to $5.3 billion and held steady last year at $5.2 billion.

Now, however, Canada forecasts another cash income bummer for 2006, $4.4 billion, or 16 percent below last year, and a realized net cash income of just $717 million, a 54 percent plunge from 2005.

During the brief reprieve, Ottawa commissioned a search for ag answers. The result, labeled the Easter Report and issued to broad acclaim last July, pegged “market power” as the root cause.

“Agri-business corporations have it,” summarized The Western Producer, a Saskatoon-based farm weekly, “farmers don’t.”

The report (www.agr.gc.ca/farmincome_e.phtml#sech) also offered a series of policy alternatives Ottawa and the provincial capitols could enact to stem the slow starvation of Canadian farmers and ranchers.

Despite its prescriptions, The Easter Report played a minor role in the national election.

A more incendiary Conservative idea, altering - even ending - the Canadian Wheat Board’s monopoly wheat and barley export authority, got more ink and more traction.

Three weeks after Harper and Conservatives claimed victory, though, that campaign idea appears undoable. The numbers and the politics just don’t add up.

First, while the Conservatives won the House of Commons, their 124 seats are 31 short of clear majority in the 308-chair chamber. That means Harper will be shopping for help to enact any of his ideas - tax cuts, health care reform, a CWB remake, more free trade - from the 103-seat Liberals, 51-seat Bloc Quebecois or 29-seat New Democrats while avoiding the appearance of selling out to the very folks his party conquered.

Second, and more importantly, Canadian producers are divided over the Wheat Board’s future. Many favor “freedom of choice;” the Board would remain, but other firms or farmers could get in the export game, too.

CWB proponents, however, see any dual structure as a deathblow to the monopoly and are fiercely unwilling to alter its government-endorsed, historical role.

The division ties Harper’s hands as Canadian farmers and ranchers continue their downward spiral. Any really big reform idea, like opening the CWB to competition, requires votes the Conservatives don’t have.

And even milder reforms, like those in the Easter Report - more government antitrust oversight, increased support for new farm cooperatives, more transparent markets, domestic country of origin labeling, greater rural development - are Liberal ideas the country, especially farm country, solidly rejected Jan. 23.

In that respect, Canada and the U.S. are strikingly alike: A deeply divided agriculture expects a deeply divided government to come up with a consensus solution to its deep and endemic ailments.

Hardly a recipe for success regardless who’s doing the cooking, eh?

This farm news was published in the February 22, 2006 issue of Farm World.

2/22/2006