To Tell the Truth on Farm Subsidies

Al Mussell and Brent Ross
The George Morris Centre
April 16, 2001

 There has been a lot of public discussion lately about farm incomes in Canada and the role of agricultural subsidies. Lawrence Solomon of the Urban Enterprise Institute has been at the forefront of these discussions1. His argument is that as a result of exorbitant subsidies, the government is sponsoring the industrialization of agriculture, which threatens the family farm at untold environmental costs. This is a surprising line of reasoning, given that the more common argument is that subsidies misallocate resources in such a way that smaller, less efficient farms can persist when they otherwise couldn’t, and that subsidies cause farmers to more intensely farm an acre of land. In fact, it is primarily the small farm advocates that argue for more subsidies.

In any case, the significant claim made by Mr. Solomon is that government subsidies exceed the value contributed by agriculture to the Canadian economy. This claim is patently false, and only serves to confuse the public’s understanding of the current income situation of Canadian grain and oilseed farmers. This misconception must be corrected. When Solomon first made these ridiculous claims last year, we thought the best response was to ignore them hoping most people would ignore them, as they deserve. But since the National Post has seen fit to publish them again, they need to be corrected.

Click here to view entire response in PDF form

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