The Canadian Federation of Agriculture set the bar high when it asked for $2.6 billion in emergency COVID-19 aid. When the federal government responded on May 5 with a program worth $252 million, the disappointment felt throughout the farming community was not surprising.
The funds were indeed underwhelming, and it will not be enough to get some of those on the precipice to stick around. Many will exit the industry, regrettably. Before the announcement, the Agri-Food Analytics Lab (AAL) estimated that as many as 15 per cent of Canadian farms would likely close due to COVID-19, and Ottawa’s plans will not change that. Losing farms will not compromise our nation’s food security – farmland never disappears as it can always be exploited by someone else – but it does affect how we create jobs and wealth in rural economies located far from urban centres. This should be a priority for Ottawa.
Canada has a diverse agriculture sector with a range of production cycles, which means COVID-19 will affect each type of crop or livestock a little bit differently. However, the pandemic has disrupted all sectors of the agri-food industry in two main ways. First, with the shutdown of the restaurant industry, demand for food products has evaporated. This has led to larger surpluses, produce that can’t be sold before it rots, and more livestock than farmers can accommodate. Second, food producers, like other businesses, have had to adjust their practices to comply with pandemic guidelines around physical distancing and sanitation. So whether it’s production facilities installing plexiglass shields or potato growers retooling their seeding machinery to keep workers further apart, costs are mounting.
Ottawa’s response to calls for help from the agriculture sector was slow in coming. In the United States and Europe, most governments provided financial aid directly to farmers weeks ago so they can deal with the aftermath of COVID-19. They also provided more aid per capita: in the United States, every American is providing $86 in support for agriculture by way of government-sanctioned programs, according to AAL estimates. In Europe, it is more than $90 per capita. By comparison, each Canadian is giving $6 to support agriculture. Farmers have every right to be disappointed.
Canada’s aid package includes $125 million to support livestock farmers through the AgriRecovery program, but this raises a variety of questions. Few details were given about the role of provinces, or how much farmers will receive. Executing the program will also take time, something producers do not have. The measures presented will not likely prevent more animals from being euthanized in days to come, as farmers are confronted with the costs of managing and feeding more animals than they can afford, and killing farm animals for no reason is never a good thing.
There were interesting elements to the plan and Ottawa deserves credit for these. One of them was the proposal to give the Canadian Dairy Commission an extra $200 million in credit to help expand its storage capacity for surplus dairy products, which could help avoid further milk dumping. The recognition that the Canadian Dairy Commission – the Crown corporation responsible for properly managing milk surpluses – is the ideal agent for dealing with the issue was the right decision.
The other interesting aspect was the $77.5 million allocated to expand domestic food processing capacity. Only a few times have we seen Ottawa recognize food processing as a worthy sector for investing. The agri-food sector cannot be vigorous without a reliable, strong processing sector. Our processing sector, however, is in crisis. In fact, it was in a crisis even before the pandemic. The sector has lost 12 jobs a day, every day, since 2012. That is 35,000 jobs, and barely anyone has spoken about it. Processing is the cornerstone for any food supply chain. Weaknesses in processing will always arise in times of crisis, like COVID-19, and this sector is desperate for more attention.
High expectations will bring disappointment. But even if it didn’t live up to farmers’ expectations, Ottawa presented a decent plan, a measured one. It also gives a sense of what needs to be improved over time. The plan supports the food processing industry in keeping employees safe at work, as well as mechanisms to allow farmers’ unsold food products to be repurposed strategically with some central coordination, which means less of it would go to waste. These are good signs for the future.
However, much more work is needed to ensure that fewer divides exist within the food chain. Farmers should care about processors, and vice versa, in order to nurture trust and flexibility during uncertain times.
An even bigger divide is the one that remains between rural and urban Canada. In light of that, $252 million for farmers is a decent start. Prime Minister Justin Trudeau mentioned that this aid package was a first step. Let’s hope so, for the sake of the agriculture sector and the communities that rely on it.
Dr. Sylvain Charlebois is a professor and senior director of the Agri-Food Analytics Lab at Dalhousie University.
