AgWired

A Professor from Saskatchewan, Canada shook the farming world a little when he said ship up or shape up, or the family will go the way of the dodo bird.

Professor Hartley Furtan has defined the problem of the grains and oilseeds sector and thrown out a challenge to the public what they want to do about it. The problem is not over production, nor inefficiency, nor even gross farm income. The issue is low grain prices and high input costs leaving a small or even negative profit margin, says C.M. (Red) Williams, President, Saskatchewan Agrivision Corporation in his Monday Memo.
“Furtan suggests that one solution is to do nothing. With predictions for a number of years of low grain prices the result will be a decrease in production and a growing social problem for those farmers that were depending upon the sale of land for their retirement,” says Williams. “On the other hand, if some method of providing an assured income is developed, then the Canadian taxpayer needs to understand and support the approach.”

Out of all the industries that struggle from time to time, the reason why the grains and oilseeds industry should be singled out for special attention is quite direct. There is about $85B of GDP that depends directly on a supply of grains and oilseeds. The industries stretch from cattle feeding to flour milling. These industries have already suffered from the variability in grains supplies but would shrink or move to the U.S. where supply and price are predictable.

Now, there is the issue of how to support the grains and oilseeds industry without unnecessarily inflating production, or bringing down the wrath of the WTO. CAIS allows for support of income up to 70% of some base, but it is the remaining 30% that needs attention. The cost is about $3 billion, says Williams.

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