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A interesting a true comment on US grain production/subsidies

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    A interesting a true comment on US grain production/subsidies

    Sask Pork Calls for New National Agriculture Policy

    Farmscape for April 21, 2006 (Episode 2118)



    Sask Pork is calling for new national agricultural policies that will put Canadian farmers on a level playing field with their American competitors.

    Earlier this week, in its final injury determination, the Canadian International Trade Tribunal ruled unprocessed grain corn imported from the United States into Canada has not harmed and does not threaten to harm the Canadian corn industry ending the collection of provisional countervail and antidumping duties being collected on those imports at the border.

    Sask Pork General Manager Neil Ketilson suggests the problem that caused the dispute in the first place and which needs to be addressed is the subsidy difference between Canada and the US.



    Clip-Neil Ketilson-Sask Pork

    The United States has a basic philosophy whereby their policy is based on having their producers grow a very cheap product and subsidizing them to do that and that cheap product provides an input into the value added sectors.

    Back in the 1950s they developed an agricultural policy that basically supported very very cheap agricultural primary production, grain and oilseeds, so they produce very cheap corn but what they do with that corn, even though it's subsidized to the corn producers, they use that corn to feed into the value added industries and then they don't subsidize the rest of the value added chain.

    They just do it right at the very base and then they're done.

    We don't have that situation in Canada.

    We expect our producers to export their products at whatever the world market price is and then we will somehow try and stabilize the price after the fact.

    They're quite inconsistent in terms of the approaches and the objectives and the end result of what those policies are doing and the implications to the entire western economy.



    Ketilson suggests we really need a made at home agricultural policy that will determine how agriculture is going to look in Canada and how it will fit in with other value added enterprises.

    #2
    I found this comment to be particularly astute at cutting through to the basis of the US farm support system. It will be interesting to see how the bio energy needs of the US will be reflected in the US Farm bill.

    Comment


      #3
      Almost off the screen but curious on comments on where Alberta/Canadian policy should go. Should government look at the US loan rate (maybe a modified revenue insurance)? GRIP 2006?

      With 20 % (and growing) of US corn being used in ethanol, have our neighbors to the south crossed the line in not being able to do the above any more? How much more technology can the US put into corn that already yields 150 bu/acre? Suppose they could start bringing back conservation reserve land.

      Comment


        #4
        Charlie;

        I suggest we look at the cost side of the farm.

        1. If I invest $150/ac in a crop, how much tax, interest, and royalties are truly a part of this investment.

        2. A typical investment has 50% cost in labour (soft cost), the other 50% is hardware the input consists of.

        3. A wild guess at something like frieght, fuel, fertiliser, crop protection, interest; these portions would flow at least 50% back to the government in taxes or positive flow through benefits to the economy.

        If we took a 30% value on a crop like Canola, this would mean a flow through back to society of $45/ac.

        A credit back system for lowering our costs is key. As Canadian governments raise taxes, allow extraction of huge profits from primary agriculture through consolidation and anti competitive policies;

        Our primary ag production will obviously be loosing massive cash to monopoly based input to our ag cost base.

        What is the actual "cost" of an item? Groceries like are bread/peas/lentils are 70% marketing, a loaf of bread or doughnut returns about 6% to the wheat farmer in western Canada. Pulses aren't much different.

        SO what is the objective of a program?

        To have a stable supply of needed produce.

        We need to get our heads around the cost side of Agriculture... to truly fix... FAIRLY... the income crisis.

        Governemnt is firmly in control of taxes and consolidation of "industry" and needs to flow through these "profits" as "dividends" back to primary agriculture.

        Last thing Charlie.

        You were in the Ukraine... is the cost base the issue of a profitable Ukrainian farm? Absolutely.

        Studies show cost "control" is primary to a "profitable" Canadian farm... which simply means now we can cash flow the year and remain liquid financially.

        Ag primary producers the world over are all in this same state of affair... having the cash flow squeezed out of them! THis is the scheme...

        It is how we look at life that counts... we are born with nothing when we arrive... we take nothing with us when we leave this little planet.

        What do we need? What are we entitled to?

        These are the questions that the farmers in Brazil are asking... and as we head for a CDN$1.1 instead .65

        Comment

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