Provincial

Sask. agriculture in trouble

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Created on Wednesday, 04 February 2009 19:15

by Mike Raptis

Saskatchewan isn’t immune to the global economic crisis after all. While the province led the country in economic growth for 2008, the agricultural industry is struggling.  

“There are a lot of stresses out there,” said Bob Bjornerud, Saskatchewan’s minister of agriculture.

“On the cattle side, farmers and ranchers are having trouble meeting their payments. On the grain side, when you add the input costs... with high fertilizer and fuel costs, just about every expense that a producer has out there right now has gone up quite dramatically in the last number of years.”

Currently, Saskatchewan’s Agricultural industry accounts for 7 per cent of the province’s GDP - which is the total market value of goods and services produced by workers and capital.

“While the primary production side of agriculture does not appear large in provincial GDP accounts, it is nonetheless an integral part of the economy,” said Clare Kirkland, director ostrategic development for the Regina Regional Economic Development Authority, a shareholder-based organization working with the provincial government through Enterprise Saskatchewan.   

Across the board– from wheat, canola, barley to livestock– prices have never been so low. In late January, wheat was selling at $155.10 a tonne  – about half of the $291.76 the provincial government anticipated in their 2008/2009 budget.

Cattle prices are suffering even more.

“I don’t think cattle prices have recovered to where they should be and we know there are tough times out there in the livestock industry,” said Bjornerud. “But I was suprised. I was up at Crop Production Week last week in Saskatoon for about three days and there’s optimism out there.”

Kirkland foresees the improvements in the province’s trade, wholesale, and transport sectors will directly aid the agricultural industry: particularly through agricultural exports.

“The better our transportation system serves exporters the better the demand for farm production,” he said.

But according to Stuart Wells, the Swift Current-based president of the National Farmers Union, increased trade only leads to lower Canadian family farm incomes.

“The key economic factor is the dysfunctional marketplace," Wells said.

“Just like farmers all over the world, Saskatchewan’s family farmers are being forced off the land - partly due to better technology, but in a much larger way by deliberate government policy which has been overwhelmed by the international corporate agenda.”

“The conundrum is this: per farm productivity has greatly increased over time but this has coincided with the worst farm incomes in history over the past twenty years, while corporate incomes have skyrocketed,” he said.

“This is unsustainable by anyone’s measurement.”

Minister Bjornerud agrees that the volume and quality of Saskatchewan’s crop was actually very good in 2008, but recognizes the provincial government needs to do something to kick-start the industry for 2009.

A number of incentives are being put in place to increase farmer’s income.

“One of the things we’re doing... is increasing the education tax rebate on farmland - and that’s been a sore spot with producers for many years and has been a heavy burden on agricultural land,” he said.

When the Saskatchewan Party came into power, the education tax rebate was at 38 per cent. It was promptly bumped to 46 per cent - and for this fiscal year, it will be increased to 56 percent.

“Our intention is to go to 66 per cent in the third year, then up to picking up 80 percent of the education tax on farmland,” said Bjornerud.

The minister also plans on bringing back AgriStability, a program that was once deemed as too slow and too complicated by the farmers it was supposed to help.

“We’re going to... try to help producers understand the program but make it more time-sensitive,” said Bjornerud.

Other programs in place for 2009 include the regional extension services, a community wells program for the drought-ridden southwest area of the province, and a gopher rebate program which will cover 50 per cent of the cost for anti-gopher materials.

“Both governments (federal and provincial) must start to work on policies that are specifically designed to increase and stabilize farmers’ income,” said Wells, the NFU president.

Bjornerud said the province is trying to do just that.

“We’re trying to leave more farmers with more money in their own pockets and actually cutting their costs a bit,” said Bjornerud.