Manitoba_Rancher
Well-known member
I got this out of the local paper. It was a letter to the editor. Thought it was very interesting.
I am writing this letter to give you my views on how the imbalance between farm gate prices for grains and oil seeds and the prices at the retail end have occurred in the last 30 years.I have attached graphs that were published in Western Producer last December that show the steady increase in the spread quite clearly.
Long-term solution to farm income crisis
It's obvious we are growing too much grain. To reverse this trend we have to take land out of produc¬tion. This seems simple enough, all we need to do is have more chem fallow. The problem with that is banks, lending institutions, crop input suppliers and machinery companies have such a strangle hold on us financially that we have to crop every acre just to circulate money to service the debt. If you have a look at the stats on the increase in farm debt over the last 20 years you will understand what I'm talking about, Governments of the day have got to get involved in a serious way and help us get this land out of produc¬tion with a program that has long-term effects and eventually causes the money to come from the market place.
Money to finance a program this size is going to have to come from existing programs and budget surpluses. The CAIS program should be scrapped because it doesn't work anyway; crop insurance has got to the point that it is practically worthless. I also think you should have a look at what's being spent on crop and oilseed research. Why would we spend money developing crops that produce more of what we have already got too much of? How ridiculous is that? Let's scrap these programs, add some money
To show yoo from first-hand experience how far everything has got out of balance I'll have to go back to when I started fanning. I started farming in Sas¬katchewan in 1973.1 worked at the local potash mine until the spring of 1974, when I quit the mine to farm full-time. Top rate at the mine was about $3.90 per hour and we were receiving $4.50-$5 after freight and elevation for a bushel of HRS wheat. In 2006, top rate at the mine is about $30 per hour and we're now receiving $3-$3.50 after freight and elevation for a bushel of HRS wheat. In 1974, you could purchase a tonne of potash from the mine for about $18, now it costs us $200. Today based on a $2 loaf of bread the farmer receives about $3.25 for a bushel of wheat and when you purchase the bread at the store you pay about $ 120 for that same bushel of wheat. As you can see from these examples, that to call this an imbal¬ance is an understatement.
Cereal prices healthy, corn stagnant
So what got us in this mess? Simply put—diversi¬fication. When grain handlers and food processors have an increase in operating costs, they simply pass this cost on to the end user. Fanners can't do that so we turn to governments for help. The few scraps that governments have thrown us the last 15 years has been about as effective as putting a bandage on a broken leg. When we've told governments these little bits of money aren't doing much good they've told us we have to diversify. What's happened is we've diversified ourselves right out of business. Now is the time for governments to quit giving us lip service and get down to business and put some serious money into a serious problem.
RIVERS BANNER Saturday, April 15, 2006 Page 13 from the budget surpluses and develop a program that actually works for farmers and ratepayers in this country.
What should this program look like? I think it should be a five-year program that reduces the seeded acreage of grain and oilseeds by 50 per cent The only way a producer could access money out of this program would be by proving through a government inspector that you actually took that land out of production. It should be financed 80 per cent by the federal government and 20 per cent by the province. The first year should pay out $80 per acre to a maxi¬mum of 50 per cent of your normal seeded acres. Year two would pay out $70, year three $60, year four $50 and the last year would pay out $40 per acre. This payment can be reduced each year because the stock¬pile of grain will be reducing and every year more money will be coming from the market place, as well as crop input costs would be declining.
While this program is in place, governments should be lobbying other countries to come up with a program of their own to reduce seeded acres. If all countries did this, there wouldn't be any need for subsidies because all the money would be coming from the market place. The only agriculture program that would be needed in conjunction with this pro¬gram would be a voluntary weather disaster program that is run the same as hail insurance.
I am writing this letter to give you my views on how the imbalance between farm gate prices for grains and oil seeds and the prices at the retail end have occurred in the last 30 years.I have attached graphs that were published in Western Producer last December that show the steady increase in the spread quite clearly.
Long-term solution to farm income crisis
It's obvious we are growing too much grain. To reverse this trend we have to take land out of produc¬tion. This seems simple enough, all we need to do is have more chem fallow. The problem with that is banks, lending institutions, crop input suppliers and machinery companies have such a strangle hold on us financially that we have to crop every acre just to circulate money to service the debt. If you have a look at the stats on the increase in farm debt over the last 20 years you will understand what I'm talking about, Governments of the day have got to get involved in a serious way and help us get this land out of produc¬tion with a program that has long-term effects and eventually causes the money to come from the market place.
Money to finance a program this size is going to have to come from existing programs and budget surpluses. The CAIS program should be scrapped because it doesn't work anyway; crop insurance has got to the point that it is practically worthless. I also think you should have a look at what's being spent on crop and oilseed research. Why would we spend money developing crops that produce more of what we have already got too much of? How ridiculous is that? Let's scrap these programs, add some money
To show yoo from first-hand experience how far everything has got out of balance I'll have to go back to when I started fanning. I started farming in Sas¬katchewan in 1973.1 worked at the local potash mine until the spring of 1974, when I quit the mine to farm full-time. Top rate at the mine was about $3.90 per hour and we were receiving $4.50-$5 after freight and elevation for a bushel of HRS wheat. In 2006, top rate at the mine is about $30 per hour and we're now receiving $3-$3.50 after freight and elevation for a bushel of HRS wheat. In 1974, you could purchase a tonne of potash from the mine for about $18, now it costs us $200. Today based on a $2 loaf of bread the farmer receives about $3.25 for a bushel of wheat and when you purchase the bread at the store you pay about $ 120 for that same bushel of wheat. As you can see from these examples, that to call this an imbal¬ance is an understatement.
Cereal prices healthy, corn stagnant
So what got us in this mess? Simply put—diversi¬fication. When grain handlers and food processors have an increase in operating costs, they simply pass this cost on to the end user. Fanners can't do that so we turn to governments for help. The few scraps that governments have thrown us the last 15 years has been about as effective as putting a bandage on a broken leg. When we've told governments these little bits of money aren't doing much good they've told us we have to diversify. What's happened is we've diversified ourselves right out of business. Now is the time for governments to quit giving us lip service and get down to business and put some serious money into a serious problem.
RIVERS BANNER Saturday, April 15, 2006 Page 13 from the budget surpluses and develop a program that actually works for farmers and ratepayers in this country.
What should this program look like? I think it should be a five-year program that reduces the seeded acreage of grain and oilseeds by 50 per cent The only way a producer could access money out of this program would be by proving through a government inspector that you actually took that land out of production. It should be financed 80 per cent by the federal government and 20 per cent by the province. The first year should pay out $80 per acre to a maxi¬mum of 50 per cent of your normal seeded acres. Year two would pay out $70, year three $60, year four $50 and the last year would pay out $40 per acre. This payment can be reduced each year because the stock¬pile of grain will be reducing and every year more money will be coming from the market place, as well as crop input costs would be declining.
While this program is in place, governments should be lobbying other countries to come up with a program of their own to reduce seeded acres. If all countries did this, there wouldn't be any need for subsidies because all the money would be coming from the market place. The only agriculture program that would be needed in conjunction with this pro¬gram would be a voluntary weather disaster program that is run the same as hail insurance.