About two weeks ago, on September 17th, there was a rush for public money that Islanders should feel good about. At 8 A.M. sharp, farmers could phone to apply for financial support for soil conservation projects to prevent erosion. The only problem? The available money was used up within minutes.
The Agriculture Stewardship Program is cost shared between the province and the federal government. It supports a wide range of sustainable farming practices that protect or enhance soil and water resources, use energy more efficiently, promote integrated pest management and precision farming, and the production and marketing of bio-products. The program provides between 50 to 60% of proven costs, and many current practices like tile drainage are ineligible.
If you’re Maxime Bernier, these would be seen as business subsidies and a drag on the economy. More fair minded people would acknowledge that virtually all governments subsidize agriculture, some like the Americans and Europeans, to the tune of billions a year. Important questions are now being asked about how this money is spent.
This is a little simplistic, but farm financial support here can be seen this way: in the 1970’s, the advice and support given to farmers on PEI was to shift away from small mixed farms, instead to specialize in one crop, buy bigger equipment, knock down hedge rows and work larger farms. Now that farmers were in commodity markets and competing internationally, the 1980’s moved to income support. “Tripartite Stabilization” was the word tripping approach then.
New trade deals in the late 1980’s and ’90’s with the World Trade Organization (WTO) and the United States prevented direct subsidization of crop and livestock production. Canada was one of the few countries that actually took this seriously, more because the country simply couldn’t compete with the treasuries of the U.S. and Europe. Crop insurance and disaster relief programs have continued throughout.
What’s new in the last decade is a greater emphasis on slowing down the environmental impact of chasing those low prices in international markets, a true race to the bottom. Ironically, here on PEI, recent government programs are trying to fix some of the problems that began with the commodity push in the 1970’s. (Let’s replant those buffer zones and hedgerows!)
There’s an awful word that economists and policy analysts use: incentivize. It relates to how business people respond to government programs. There’s growing evidence that farm subsidies everywhere do little to incentivize farmers to farm differently despite obvious proof that wildlife, waterways, and soil health are constantly threatened and deteriorating. A recent study by the Food and Land Use Coalition reported that just 1% of the $700 billion spent worldwide on farm subsidies right now is used to benefit the environment.
This has to change for two reasons. There’s no justification for losing tons of precious topsoil every year, adding killing sediment and nitrates to waterways, and putting pollinators at risk. As well, we can’t keep treating the many farmers doing the right things like suckers. They spend the time and the money to plant cover crops in the fall, limit pesticide use through the use of crop scouts and integrated pest management, manage fertilizers properly through the summer, increase to four and five year rotations, but without the proper incentives the bottom line simply treats these as costs in a business with very marginal profits to begin with. The marketplace doesn’t care or reward these farmers, so government money must.
The Agriculture Stewardship Program has the right incentives but clearly needs more money. If the demand to take steps to prevent soil erosion on PEI is oversubscribed, take that as a good thing and increase the budget. There is also a new effort to identify fields that are the most vulnerable to soil erosion and set-up a separate fund to deal with them. None of this can happen quickly enough.
These issues are getting some attention in Canada and the U.S. right now. There’s a federal election on here, and the Democrats are trying to find a presidential nominee to take on Donald Trump. Elizabeth Warren is known a s policy wonk, but has considerable momentum at the moment. This is her take on how farm subsidies are used in the U.S.: “Our current system of subsidies is supposed to make up the difference between the low prices farmers get on the market and what they have to pay to grow food. But instead it lets big corporations at the top of the supply chain get away with paying artificially low costs while farmers struggle…. As it stands, our current system squeezes small farmers, undermines sustainable farming for the long-term, and damages our climate.”
Warren is proposing significant changes that “will guarantee farmers a fair price, reduce overproduction, and pay farmers for environmental conservation.” Canadian farmers would benefit from these proposals too as most commodity prices are set in the U.S.
It may be that the current attention being paid to climate change will force the hands of governments here and elsewhere. There’s growing interest in something called regenerative agriculture. It’s designed to capture carbon and slow down the impact of climate change. This will need research support and proper incentives as well. More on that in future columns.