The new American Farm Bill contains a double whammy. It proposes a reduction in farm subsidies and at the same time an expansion of voluntary conservation programs. Both policy shifts are important for us.
By and large, Canadian farmers and agriculture policy makers alike take a dim view of the way that farmers and farm commodity prices are subsidized in both the European Union and the United States. Much of this criticism is legitimate. Excessive subsidies create huge increases in grain stocks which in turn depress prices as these stocks are dumped on world markets or basically just given away.
Western Canada is uniquely vulnerable in this process, since most of what we produce is exported. The government of Canada has decided it must remain “pure” by WTO standards and not subsidize Canadian farmers. It irks me when I hear how subsidized our farmers are. To be blunt, it just ain’t so. Every comparative economic analysis has shown that they receive meagre and grudging aid from governments.
The proposed U.S. Farm Bill will have important ramifications. It contains a $587-million cut in farm subsidy spending, plus a cap of $250,000 on the maximum payment per farmer. President Bush has signalled that he wants to reduce farm aid by $5.7 billion over 10 years.
An equally important aspect of the Farm Bill generally went unnoticed by the farm and general media. Namely, in spite of huge U.S. budget deficits and a strong desire to reduce federal spending, Bush is asking for increases in support for environmental conservation. The U.S. currently spends over $4 billion a year on agricultural conservation programs, all controlled and managed by the “farmer’s” department, the United States Department of Agriculture (USDA).
The language in the news release announcing the changes was quite clever. The title read, “President Bush Reinforces Commitment to Co-operative Conservation in 2006 Budget.” Note the words “co-operative conservation” applied to the private landscape. U.S. farmers and landowners have complained bitterly for years about the regulatory approach to conservation, embodied by the hated U.S. Endangered Species Act.
“Co-operative conservation” refers to support programs that take a different tack, by providing incentives to farmers and landowners to produce what have been referred to as “environmental goods and services” for the rest of society. Not only do U.S. farmers like this approach, real and substantial environmental problems are being solved by it.
Canada and Manitoba will be direct beneficiaries of these programs. U.S. watersheds that flow into Canada will have their water quality improved as these USDA programs kick in. Manitobans should be a bit embarrassed, because it is the U.S. that has taken the first steps to reduce nutrient flows into Lake Winnipeg. The American portion of the Red River Valley will see a great increase in land-based environmental conservation programs.
We Canadians talk up a good game when it comes to the environment and are real quick to establish top heavy and ineffective environmental enforcement bureaucracies like Fisheries and Oceans Canada. But when it comes to environmental conservation in agriculture, the United States is miles ahead of us. It’s time we caught up.
