'It's a strong and vibrant industry right now': $368M farm subsidies unnecessary, says professor
Sask. agriculture industry reaps hundreds of millions in annual tax breaks
Farmers could be willing to help the provincial government balance its books, but do politicians have the guts to ask?
Bill Brown isn't sure.
Given the financial situation we're in, there has to be an openness to look at that.- Cam Goff, farmer
"You've got people out there in rural Saskatchewan who all vote for the current government. That's a political base," said Brown, the head of the University of Saskatchewan's department of agriculture and resource economics.
"Are you going to cause a political problem for a relatively small amount of money?"
The issue is a sensitive one. A number of Saskatchewan experts and academics privately told CBC News that various farm subsidies were excessive or unnecessary, but refused to discuss the issue on the record. Some declined to return calls after they learned the subject matter.
The provincial government is facing a projected deficit of $1.2 billion. The agriculture industry reaps $368 million in annual tax breaks.
That includes $121 million for farm fuel purchases. The provincial auditor said last year that the program had no defined purpose.
There's also $84 million per year in sales tax relief for farm machinery and parts, as well as $163 million for pesticide, seed and fertilizer.
"Bottom line? It's a strong and vibrant industry right now and probably could survive without them. But I'm not sure I'd want to be the politician that came up with that one," Brown said.
Farmers willing to do their part
Hanley-area producer Cam Goff said farmers have always been willing to do their part.
"Given the financial situation we're in, there has to be an openness to look at that," Goff said when asked about the subsidies.
"You can't use tunnel vision … times change, things change, situations change."
On a recent afternoon, Goff opened a creaky aluminum grain bin door and scooped a handful of dark red canola seed.
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Goff has spent his life working this land near Hanley. He recalled the tough times many farmers experienced a generation ago.
"There's no question: back then it was very much scraping by," Goff said.
In the 1980s, incomes plummeted to Great Depression-era levels. Bankruptcies were common. This harsh environment led to the creation of new support programs, subsidies and tax exemptions to help family farms weather the storm.
As Goff said, things have changed. Business is good. Prices and yields have improved, and the expansion of crop varieties such as lentils has given producers more options.
Large farms proliferating
One other difference is farm size. Thirty years ago, the Goff family's 5,000-acre operation was considered large.
Some out-of-province corporations now control more than 20 times that amount, according to a recent study by researchers at the University of Saskatchewan, University of Regina and University of Manitoba. The largest, owned by Alberta's Robert Andjelic, has Saskatchewan holdings of 180,000 acres.
The largest 17 per cent of farms now generate 83 per cent of all industry revenue, Brown said.
Operations like that were "almost inconceivable back then," Goff said.
Now maybe this is the time to do it because everybody realizes the Government of Saskatchewan's budget is in a major problem.- Bill Brown, University of Saskatchewan
With the farm economy healthy, and the provincial government facing a rising deficit and debt, Goff said it's time to look at the subsidies. He said farmers would be open to the idea, as long as taxation of rich individuals, resource companies and other businesses are reviewed.
For example, a "high-income surtax" has been proposed by the Canadian Centre for Policy Alternatives Saskatchewan director Simon Enoch. He said a tax of as little as one per cent on the wealthiest individuals has generated millions in 11 U.S. states with no measurable harm.
"You have to look at the entire economy," Goff said.
As for the agriculture subsidies, one money-saving option would be to limit eligibility to smaller operations based on acreage or income as other programs do, he said.
If the subsidies are eliminated, they should be phased out rather than nixed instantly.
Subsidies could be a tough issue to raise
The governing Saskatchewan Party dominates virtually every rural constituency in the province. It will be a difficult issue to raise, but Brown agreed the subsidies were created for a different environment.
"Now maybe this is the time to do it because everybody realizes the Government of Saskatchewan's budget is in a major problem," Brown said.
"With the price of oil and the price of potash and other minerals and commodities going down, everybody could see that as, 'Well, government's got to do something.'"
The provincial government releases its 2017-18 budget March 22.
A government official said in an email that Premier Brad Wall "has indicated that all government expenditures are under review as part of the budget process, including farm programs."
When asked about any political sensitivities, the official said the Saskatchewan Party "has been in office for nearly a decade with broad support in both urban and rural areas of the province."
In advance of the March 22 provincial budget, the CBC is examining how people in Saskatchewan are impacted, and possible solutions to the projected deficit.
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