Farm subsidy drain is tilted east, Toronto report suggests

Barry Wilson
Western Producer
June 27, 2002

When the debate over the need for farm supports is raging, prairie provinces quickly develop the reputation of being most aggressively in favour of aid, the most deeply in need and the most heavily subsidized.

But a Toronto research institute opposed to farm subsidies says that is a myth.

As of 2001, Ontario had the most subsidized farm sector, according to a report from the Toronto-based Urban Renaissance Institute. Saskatchewan and Manitoba are in the middle of the pack while Newfoundland has bumped into second place.

Larry Solomon, executive director of the institute, said in a June 21 interview that subsidies to support agriculture in 2001 were worth $3.53 for every market dollar earned by farmers.

The subsidy calculation included the consumer costs of supply management-regulated commodities such as milk and eggs.

By that calculation, subsidies and regulated revenues provided Ontario farmers $6 for every $1 of market revenue last year.

“This is an enormous transfer of wealth to the farm sector,” said Solomon. He argued it is a sign of farm economy inefficiency.

“No province operated a profitable farm economy over the past decade,” said the institute report.

The Urban Renaissance Institute says it is an independent research centre that advocates policies supporting the growth of cities and surrounding rural areas.

It insists that high subsidies help big farmers, not smaller ones.

Its Web site asks if viewers support elimination of farm subsidies that help big farmers but hurt small farmers. Of the 96 who had responded by June 21, 55 percent said yes.

Solomon said the answer is to stop subsidies for new farmers and to phase them out for existing farmers by using subsidy savings to “buy out” the benefits of subsidies.

“I think it we could phase out subsidies, it would result in a stronger small farm sector around cities and that would be good both for farmers and for the cities.”

Solomon said consumers would benefit since they pay higher food prices or higher taxes to support the present regime of regulation and subsidy.

“The subsidy system does not help consumers or family farmers. It hurts smaller farmers and helps mainly bigger farmers and it is perverse,” he said.

“The only consumers it helps are foreign consumers who get to buy our cheap food.”

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