Killing the land with farm subsidies

Philip Lee
Ottawa Citizen
April 3, 2001

As spring snow fell outside her Saskatoon office this week, Nettie Wiebe — farmer, professor and longtime political activist — was musing about an agricultural apocalypse.

Ms. Wiebe grows grain and raises cattle on her family’s 2,000-acre spread in the town of Laura, 70 kilometres outside the city.

She is also a leader of Via Campesina, an international movement to promote small-scale farming.

She stands firmly on the political left, but her message cuts across ideological boundaries when she describes the paradox that bedevils the agriculture policies of most western industrialized countries, including Canada.

Farmers are both producers of food and stewards of the land, the front-line protectors of our ecology. But government policies and subsidy incentives that reward intensive production encourage farmers to use processes that destroy land, deplete water resources and ultimately threaten rural communities. Ironically, then, farm subsidies have been dismantling the very systems they were designed to preserve.

“If we’re thoughtless about this and continue to pursue the direction we seem to be embarked on here so vigorously, … we [will] have more and more environmental degradation,” Ms. Wiebe says. “I fear that no amount of blue-boxing in Toronto can possibly make up for the kind of water and soil and ecological damage that we’re doing with our production methods.”

The environmental hazards of intensive production will destroy not only the land and resources we need for agriculture, but our farm culture as well, she fears. “[We will] have fewer people who know how to live in the countryside and know how to grow food in environmentally friendly ways. We [will be] less fit to live in the places that demand a certain kind of interaction with our ecology.

“A lot of public dollars have flowed, often [passing] through the hands of farmers, directly to the agribusiness component, the marketing, transportation, the chemical industries. That’s where the public money has gone.”

The statistics paint a bleak picture: From 1990 to 1999, the federal and provincial governments contributed $3.55 in subsidies for every $1 earned by Canadian farmers, according to the Urban Renaissance Institute, a division of the Toronto-based environmental watchdog, Energy Probe.

Ms. Wiebe questions whether the present subsidy system is a useful, environmentally friendly way of channeling public dollars.

“I think it’s pernicious. It seeds a monster that is marauding through the countryside.”

In Ms. Wiebe’s view, government policies that pay the largest operators for what they exploit instead of what they conserve, devalue both farmers and their land.

“As long as we discount raw product, it’s a very short step to discounting the environment in which it’s produced and the people who produce it.”

Five years ago, the Earth Council, an international non-governmental organization chaired by Canadian environmentalist Maurice Strong, commissioned a study of the effect of farm subsidies on sustainable development.

Andre de Moor, a Dutch economist, concluded that the subsidy regime in western industrialized countries is costing billions without helping farmers or the environment.

“The gains in agricultural production over the past decades have been impressive,” Mr. de Moor wrote in his report, Subsidizing Unsustainable Development. “Even more impressive — and unacceptable — has been the cost: the degradation of soil, the deliberate impoverishment of some farmers and just as deliberate enrichment of others, the pesticide poisoning of water, air and soil. It is a price the Earth can not sustain. And subsidies are a big part of the problem.”

Throughout the ’80s and ’90s, subsidies increased per capita, per full-time farmer and per hectare.

Mr. de Moor calculated that in 1995, taxpayers and consumers in western industrialized countries plowed $335 billion U.S. into agriculture in the form of export subsidies, import taxes and intervention prices, subsidies for fertilizers and pesticides, inspections, research and training.

This amounts to almost $16,000 per full-time farmer or $290 for each hectare of agricultural land.

As subsidies encourage farmers to produce more and use more chemicals, the vital resources of soil and water are threatened, Mr. de Moor says.

Poor farming practices such as overgrazing, short fallow periods and the cultivation of marginal lands without protection against erosion are responsible for a quarter of the world’s degraded soil.

Overuse of land and the cultivation of marginal soil leads to the excessive use of fertilizers, pesticides and irrigation. Chemicals can pollute water and irresponsible irrigation practices can salinate soil, leaving it unfit for farming.

Mr. De Moor says subsidies should not be linked to agricultural production. Nor should governments be subsidizing practices such as the use of fertilizers, pesticides or wasteful and inefficient irrigation.

Robert Sopuck, director of policy for the Delta Waterfowl Foundation, a Canadian wetlands conservation group, and a researcher and writer for the conservative Frontier Centre for Public Policy in Winnipeg, has also concluded that farm subsidies have contributed to poor farming practices.

Mr. Sopuck, who lives on 480 acres of land in Lake Audy, Manitoba, says farm support programs that are based on the number of acres farmed encourage the cultivation of lands that never should have been broken. The working of marginal lands leads to erosion, which chokes rivers, lakes and streams, and washes polluted soil into the water supply.

“We get degraded water quality and at the same time we lose wildlife habitat and biodiversity,” Mr. Sopuck says.

Mr. de Moor says farmers do not need to lose from well-planned subsidy reform. As it is, subsidies have done a poor job of maintaining farm incomes.

He found that for every $5 of public support, only $1 ends up in farmers’ pockets. The big picture shows the mind-boggling scale of this imbalance: Of the $335 billion consumers and taxpayers in western industrialized countries spent on farming and agricultural products in 1995, only $66 billion went to farmers.

Nor do subsidies protect the family farm. Most subsidies are based on how much is grown and therefore reward rich farmers. In the United States, a third of government agriculture payments go to the wealthiest five per cent of farms, Mr. de Moor says.

Given the chance, farmers will care for their land. Despite the perverse incentives of farm subsidies, there are farmers who have been quietly going about the job of preserving their own land, driven by a desire to pass their farms on to their children.

Ten years ago, Peter Dowling kicked the fertilizer and pesticide habit on his family farm in Howe Lake, Ont.

He had been growing barley using a system of “intensive cereal management,” which involved spraying chemicals on young grain shoots to strengthen them, following up with rich doses of fertilizer. His yields were high, but so were his costs. He was tired of writing cheques to chemical suppliers, and he began to question the morality of the way he was farming.

“It was not a question of economics, but a question of philosophy, (making it) more sustainable,” says Mr. Dowling, the 52-year-old head of the National Farmers Union in Ontario. “Your farm is an ecosystem in itself and the less stuff you bring into that ecosystem, and the more self-sufficient you are, the more sustainable the farm is.”

Today, his diverse, 500-acre farm is certified organic. He specializes in growing spelt, an ancient grain used in organic flour, and has found low-input farming a more satisfying way of life that is also economically sustainable.

He says his decision to reduce his “input costs” (the price of fertilizer, pesticides, etc.) and replace them with his own labour as a farm manager makes great financial sense.

Net farm incomes have stagnated for 25 years, while gross farm incomes have been rising. In 1974 in Ontario, to earn one dollar of net farm income, a farmer had to make $3.59. In 1999, to earn a dollar an Ontario farmer had to make $17.47.

“This points out the extractive nature of the system we work in, where something like $70 billion went through our hands and paid for inputs and so on and left us with the same realized net farm income we’ve had for 25 years,” Mr. Dowling says.

“What would get people out of subsidies would be decent prices from the market,” he says. “Consumers are paying ever increasing prices for food. Farmers are getting about the same income for the food they produce. In between we have the packers, processors, restaurants and retailers that are getting obscene profits.

“On the other side, it’s the fertilizer companies, the fuel companies, pesticides companies that are extracting huge profits.

“The way to solve that is to somehow give farmers more market power and to distribute some of that wealth. There’s huge amounts of wealth in the system, it’s just not been adequately distributed.

“The land takes a beating when people are strapped and have to get what they can out of it.”

While Mr. Dowling has found that organic farming makes sense to him, he points out that some conventional high-input farmers also look after their land.

Jack Penner, a Conservative MLA from Emerson, Manitoba, farms 3,000 acres with his three sons and jealously protects his lands and waters. Instead of tilling his fields, he now leaves them covered with straw to prevent erosion. He recently paid $128,000 for an “air seeder,” which spikes seed into the ground through the straw. He has redesigned his irrigation system to guard against salination. He refers to his soil as his equity, his greatest asset.

“We are true environmentalists,” he says. “We didn’t like dust blowing in our eyes in the spring, so we changed the environment simply because we want to make sure the resource base is there for our kids.”

Mr. Sopuck agrees that conventional farming is not necessarily incompatible with conservation. In fact, he argues there is an environmental case to be made for farming with chemicals that allow larger yields on smaller pieces of prime land.

He points out that during the past 15 years, the United States retired millions of hectares of land through its Conservation Reserve Program. “They took out (a piece of land the size of) Alberta … in U.S. agriculture, and yield hardly dropped at all,” he says.

“This huge chunk of land was taken out, sown down to grass in the greatest wildlife program in U.S. history, with essentially no loss of yield.” Farmers took the money they were paid for retiring their land and farmed their best soil even more efficiently.

Mr. Sopuck says scientific and technological innovations are continuing to increase the yield from grain and oil seeds production. An oversupply of those crops is keeping prices down, so the industry will continue to focus on improving the yield.

Western Canada must diversify its rural economy, taking it in a direction that government subsidies and interventions have not encouraged. If the trend toward specializing in grain and oil seeds continues, he says, rural Manitoba will eventually be reduced to about a dozen farms, with as many towns to support them. He favours an expansion of the cattle industry, and large hog farms, to provide a market for western feed grains.

Mr. Sopuck doesn’t think farmers should have to go cold-turkey when it comes to reforming subsidies. However, he believes support must be directed away from production and linked to conservation on farms.

“The West was settled because of deliberate government programs, land settlement programs, immigration programs, (transportation) subsidies, water management, dam building,” he says. “There was an implicit covenant with the people who settled here: `You do your end of the bargain and produce crops and we’ll carry our end out.’ The cold-turkey approach would be an awfully cruel way to go at this point in time.”

He thinks governments should encourage farmers to work their best land, but also to set aside some land for conservation in order to promote biodiversity, improve water quality and even provide scenic landscapes. It makes sense for taxpayers to “support the conservation of public goods on private farms,” he says.

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