national
farmers union
national
farmers union
SWIFT CURRENT, Sask."51% of the cost of a jug of Roundup is tax:" statements such as this are coffee-shop standards. Farmers claim that fertilizers and chemicals are highly taxed. This is not true.
"No one wants to let the governments off the hook when it comes to agriculture. The federal government cut the Crow, mishandled trade, and cut farm safety nets. Provincial governments dismantled farmers marketing boards and cut spending. Government cuts are a significant factor in the current crisis," said NFU Vice-President Fred Tait.
"But when it comes to the high cost of fertilizer and chemicals, farmers need to know the truth. Ever-increasing corporate profits, not taxes, are the cause of ever-rising input costs. It is time that farmers directed some of their unhappiness toward the correct targets: Agrium, Cargill, Monsanto, and Novartis," said Tait.
Approximately 15% of the cost of fertilizer is tax (Canadian Fertilizer Institute). That 15% consists mainly of corporate income taxes and royalties on the natural gas used to make the fertilizer. Farmers pay neither provincial nor federal sales tax on fertilizer. "While farmers may want lower input costs, I dont believe that they want the government to stop taxing corporate profits or collecting reasonable royalties on natural resources. Further, I suspect that even if the government did reduce those taxes and royalties, the companies would pocket that windfall. They wouldnt share it with farmers," said Tait.
Tait added: "When grain prices rose in 1995 and 96, fertilizer companies opportunistically raised their prices by 60%. Farmers need to sort out whether the problem is caused by tax-grabs or profit-grabs."
Farmers pay neither federal nor provincial sales tax on farm pesticides. Chemical companies were unable to identify any significant taxes built into the prices of their products. "Farmers pay virtually no taxes on chemicals such as Roundup," said Tait.
The National Farmers Union released its report "The Farm Crisis, EU Subsidies, and Agribusiness Market Power" on February 17. That report lists the revenues and huge profits of the companies that make farm chemicals and fertilizers and concluded that this profiteering is the primary cause of the farm income crisis.
"Unless farmers know the truth about the causes of the current crisis, they cannot find solutions. Farmers have been lied to. They have been encouraged to blame their low incomes on EU subsidies, taxes, and other red herrings. Farmers need to understand that they are making too little because corporations are taking too much," concluded Tait.
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