Letter: Budget 2022 – Economic Dignity for Farmers

The NFU sent the following letter to Finance Minister Freeland in advance of the 2022 Federal Budget.

Dear Minister Freeland,

RE: Budget 2022 – Economic Dignity for Farmers

The National Farmers Union (NFU) is a voluntary direct-membership, non-partisan, national farm organization made up of thousands of farmers from across Canada who produce a wide variety of food products, including grains, livestock, fruits and vegetables. Our mandate is focused on economic dignity for farmers. For over fifty years we have promoted the betterment of farmers in the attainment of their economic and social goals; the reduction of costs and other measures designed to increase the economic benefits of farming; legislation and other forms of government action for the benefit of farmers; and a higher standard of community life in agriculture. It is in this context we provide our comments and recommendations for Canada’s 2022 federal budget.

Need for tools to build our future
Canadians are facing a convergence of crises: climate chaos, the lingering pandemic, discontent expressed in the streets of Ottawa and at border crossings, and now, war in Ukraine. We must face the future with courage and with the proper tools to build a future that is inclusive, fair and environmentally sustainable. As Finance Minister, you have the opportunity to use fiscal powers to promote the stability, hope, and resilience Canadians need to have confidence in our future, and which will help our country become beacon of peace in this turbulent and uncertain world.

Economic dignity a struggle
It is farmers who provide the food and fibre that sustains people every day. Canadian farmers, with their knowledge, skills, management and work produce billions of dollars of value every year. Yet, farmers continue to struggle for economic dignity. Most of the revenue farmers receive makes only a short stop in their own bank accounts before bills must be paid. When climate change related conditions destroy yields and hamper harvest, farmers have even higher costs and lower revenues. Realised net farm income in 2019 was just seven percent of total revenue. Farmer numbers continue to fall, while the average farm size increases and farmland prices go up. Farm families increasingly rely on off-farm income. The next generation of farmers is unable to afford land, while over 90 percent of farms have no succession plan. As farmers retire or leave farming and their rural communities for more reliable livelihoods, land is increasingly controlled by farmland investment companies and absentee landlords. The fabric of rural life has become frayed and torn as the wealth is extracted by multinational corporations and governments offload costs onto small communities with ever diminishing capacity. Our economic, social and environmental problems are both serious and urgent.

Social solidarity and cohesion, or greater inequality and conflict?
Canada is our home – where we make our living and live our lives. As an interdependent people we rely on each other and our land to create a good life within the limits set by nature. When there are big power differentials, the opportunity emerges for some to see others as resources to be used for their own self-interest. Our economy is the concrete expression of how these relationships play out. Governments can choose to tip the balance towards social solidarity and cohesion, or towards greater inequality and conflict.

Budget 2022 can make a difference by supporting the economic dignity of Canada’s farmers.

Infrastructure for rural prosperity
Adequate infrastructure will support the prosperity of Canadians by enabling more farmers to serve the domestic Canadian market and thereby retain a higher proportion of the consumer dollar within our national, regional and local economies. Diversified agricultural production needed for a more resilient food system can only occur if the supporting infrastructure exists. Past federal budgets have preferentially funded export-oriented growth, which has resulted in both a focus on production of raw commodities for export and centralizing and concentration of Canadian food processing, creating infrastructure deserts in the rest of the country.

Budget 2022 can support building new, refurbishing and re-opening provincially-licensed abattoirs. At a time when consumers increasingly seek to support local producers, and livestock producers are adopting climate-friendly grazing systems, lack of sufficient local and regional abattoir capacity has created a bottleneck that hinders growth of vibrant regional food systems across Canada.

Your budget can also target compensation for loss of supply managed markets due to CUSMA in ways that promote on-farm processing, direct marketing and alternative production systems for dairy, poultry and eggs within the supply managed system. This could include initiatives like artisanal cheese making, pastured poultry, coin-operated milk dispensaries, local delivery to allow reusable glass containers.

And, Budget 2022 can support co-operative development to allow local food producers to pool their resources and labour to build and operate local and regional storage, distribution and marketing infrastructure.

Public trust through public regulation
Years of austerity budgeting have severely weakened independent scientific capacity within AAFC, Environment Canada, Health Canada and the CFIA. Yet the need for regulatory oversight has increased. There is an urgent need to increase capacity for effective public interest regulation in order to promote greater public trust in Canadian agriculture and protect the interests of Canadian farmers as well as consumers. A more robust, effective and transparent regulatory infrastructure will support confidence in Canada’s products and production systems, and will safeguard the public interest in the face of ever larger and more powerful private companies seeking to cut costs by avoiding public regulation.

Budget 2022 can strengthen our regulatory bodies’ capacity by hiring, training and supporting ongoing professional development of the next generation of scientific and technical personnel, and by providing organizational administrative support. Facilities need to be maintained and upgraded, and new facilities need to be built and equipped to enable regulators to do independent scientific review of new products, to reassess existing products, and to horizon-scan for emerging issues and address them proactively.

Public plant breeding for resilience and food security
To ensure public plant breeding will continue to produce high quality seed adapted to Canadian growing conditions to produce crops that our domestic and international customers value, Budget 2022 should rebuild public plant breeding capacity. This will ensure Canadian public breeders are working on the full range of crops needed for a diverse agriculture system that has the resilience needed for climate adaptation and mitigation as well as food crops to support food security by supporting Canadian production of the range of fruits and vegetables needed for a healthy diet.

Taking down barriers for new farmers
Budget 2022 also needs to counter the barriers faced by new farmers, including women, BIPOC and New Canadians, who want to establish successful careers in farming. Access to land is a critical question for these farmers. Ownership is often out of reach due to the high cost and amount of debt required to purchase. Budget 2022 can provide funds for organizations to explore alternative forms of land tenure that provide long-term access and which support environmental stewardship and community-building. Successful models can inform new policy initiatives to reverse the vicious circle of concentration of farmland ownership and the resulting deterioration of rural communities and erosion of rural quality of life.

Balancing power in the marketplace
The interlocking global crises of climate, pandemic and war have resulted in supply chain disruptions with upstream and downstream impacts on farmers’ livelihoods. However, due to decades of merger and acquisitions driven by globalization, in many critical sectors agriculture is dominated by a few, very powerful multinational corporations which have such vast market power that they can dictate prices that have punishing results on farmers and consumers. Budget 2022 can remediate this power imbalance by introducing fiscal and regulatory measures to prevent profiteering. For example, the NFU has suggested implementing a revenue cap on federally inspected beef slaughter plants modelled after the Maximum Revenue Entitlement that regulates grain freight rates in the public interest, as both industries are characterized by near monopoly dynamics and captive shippers/suppliers.

Working together to address climate change
As the Supreme Court of Canada has stated, climate change is “an existential threat to human life in Canada and around the world.” Canadian farmers are reaching the limits of what they can do about the climate crisis as individuals. The NFU proposes the federal government should establish a dedicated public institution modelled after the widely-admired and respected former PFRA. It would have the capacity to coordinate efforts to reduce emissions in agriculture, contribute to meeting Canada’s economy-wide emissions reduction targets, and develop and implement urgently needed adaptation measures. Budget 2022 could lay the foundation for a new, Canadian Farm Resilience Administration to promote Canada’s prosperity through emissions reduction that supports sustainable food production and farmer empowerment.

Future-proof with fairness
In closing, while global crises multiply and intensify it is clear that we can no longer afford a food and agriculture system designed to maximize the ability of the most powerful to extract value with “just in time” and “lean” approaches while leaving farmers, workers and consumers and our communities to absorb mounting costs and burdens. Budget 2022 is the perfect time to begin building a policy framework that provides the economic dignity and resilience Canadians need to navigate our interdependent future with confidence.

Sincerely,

[signed]
Katie Ward, President
National Farmers Union

CC – Hon. Marie-Claude Bibeau, Minister of Agriculture and Agri-Food; Hon. Ed Fast – CP Finance Critic; Daniel Blaikie – NDP Finance Critic; Gabriel Ste-Marie – BQ Finance Critic; Alistair MacGregor, NDP Agriculture Critic; John Barlow – CP Agriculture Critic; Yves Perron Bloc – BQ Agriculture Critic; Elizabeth May – Green Party