Philip Lee
The Ottawa Citizen
March 15, 2001

Subsidies won’t save Canada’s family farms.

Farmers themselves admit that, despite taking to the streets across the country yesterday to demand that governments more than double their latest $500-million aid package.

Darrin Qualman, the executive secretary of the National Farmers Union in Saskatoon, says farmers need government aid now to survive, but it is more important for Ottawa to respond to their plight with more than money.

“The federal government pays money to farmers, then refuses to do the relatively inexpensive and effective things that would end the crisis and the need for that money,” Mr. Qualman says. “We’re tremendously frustrated. It’s like a doctor who will continue to give you blood transfusions, but won’t cure the disease.”

For both Mr. Qualman and other, more strident critics of farm subsidies, the central question for Canada’s family farms is whether market forces alone should be allowed to determine whether they live or die.

Lawrence Solomon, the executive director of the Urban Renaissance Institute in Toronto, has long argued that farm subsidies should be eliminated in Canada.

In his view, there are too many farms in Canada and too much marginal land in production.

“There are harmful effects for the economy and there are harmful effects for the environment, and there aren’t any beneficial effects to speak of,” Mr. Solomon says. “There would be some disruptions in eliminating the subsidies, but there’s really no public policy rationale for maintaining them.”

An end to subsidies would reduce the number of farms and return marginal farmland to wilderness, he says. The farms that remained would be smaller and clustered primarily around urban centres. They would supply cities with fresh produce and wouldn’t face competition from foreign suppliers.

Canada needs to face the fact that it may not have an advantage over foreign competitors to produce certain types of food and taxpayers shouldn’t prop up unsustainable enterprises, he says.

Farms situated around cities tend to be productive and lucrative. They don’t need subsidies, which encourage large-scale farming.

“The family farm would do very well without all these subsidies,” Mr. Solomon says. “It’s these subsidies that are destroying the family farm.”

However, Mr. Qualman argues that thousands of small family operations in Canada are now being squeezed by a handful of giant agribusiness corporations. In the marketplace, small farmers are suffering from a huge imbalance of power.

“That’s not a radical idea,” Mr. Qualman says. “That’s something you find in every first year economics textbook. If you’ve got a transaction where one entity is huge and has no competitors and on the other side of that transaction you’ve got a relatively tiny buyer and seller with a huge number of competitors, it will be an extremely unfair and unequal transaction.”

He says the federal government refuses to consider the idea that in some areas of farming, the marketplace alone can’t solve all the problems.

“To paper over this market failure, the Canadian government gives taxpayers’ money to farmers hoping against hope that something will change and this problem will just go away,” Mr. Qualman says.

“What people are really saying is that if agribusiness is succeeding in choking farmers economically to death, then maybe the solution is to just let farmers die. There’s so much money in that agrifood chain, farmers could get a fair and adequate chunk and the rest of the trans-nationals would hardly even notice it.

“Farmers are starving economically in an agrifood chain awash with trillions of dollars. When you look at the amount of money that sloshes back and forth in that agrifood chain, from consumers through to processors and restaurants and fertilizer companies and feed companies, everyone in that chain makes huge profits, except the farmers.”

Mr. Qualman insists there are solutions to the farm crisis in Canada apart from reducing all debate to a decision either to subsidize or not.

“That’s the great untold story here,” he says. “What most people in urban centres think is farmers are suffering because they’re inefficient or because of European subsidies, and as Canadians we have to decide whether we want to give them money year after year until the problem is solved somewhere else, and that’s not the case at all. The problem can be solved here and now. The cure costs less than treating the symptoms.”

For example, the Farmers Union argues that the federal government could announce that it intends to double the price of grain by cutting a deal with the United States, the European Union and Australia to take a certain amount of land out of production each year. Simply by announcing this plan to curb production, grain prices would begin to rise, Mr. Qualman says.

Ottawa could also help and encourage farmers to move toward organic agriculture. Now, when grain prices rise, large suppliers of seed and fertilizer take the extra money out of farmers’ pockets. By helping farmers disconnect from these corporations, governments would allow them to keep more of their money at home and in rural communities.

Mr. Solomon’s solution is more straightforward: Canada should make a transition to a market farm economy, eliminate subsidies and use the money to buy out farms and help farmers find a new way to make a living. Older farmers could be eased out through a grandfathering agreement.

While the National Farmers Union maintains that farmers are now losing money on a scale they haven’t seen since the 1930s, Mr. Solomon suggests the picture may not be so bleak.

The average Canadian farm is worth several hundred thousand dollars and many farmers own spreads worth more than a million dollars.

“The average farmer is far, far better off than the average Canadian, and yet it is the average Canadian who is supporting the average farmer,” Mr. Solomon says. “The farmers are complaining about justice, but the justice is all on the other side.”