The Grain Growers of Canada watched the budget yesterday with mixed feelings. On one hand we are seeing record prices for our products, but on the other we know that good times go in cycles and we need to be prepared for the future.
Strong grain prices will be underpinned by strong demand. That demand is both domestic and foreign. While we will always be exporters, we also watched the budget closely to see what measures might be in place for our domestic marketplace, and were pleased to see a couple initiatives.
Firstly, the measures announced to assist the livestock producers as our domestic feed markets are still one of our most important markets. They will have quicker access to cash advances to help them through this difficult time and there was $50 million to cull the national sow herd. Rumour is that this will require the older sows to go into rendering, and not be put into human consumption, thus further depressing prices. This is a tough moral decision though.
Secondly there was around $10 million for research into bio-fuel emissions and to test an E85 level. (fuel with 85% ethanol). There were also some tax incentives for bio-gas producers, and money for the auto sector for greener cars. All of these pieces are supportive of a domestic bio-fuels industry being developed in Canada. Again, this is a domestic market where our grain is consumed locally.
In other areas of the budget, there was the continued expansion of Capital Cost Allowance deductions for investment in equipment and machinery for manufacturing and processing. This is an incentive for producers who want to value add to their products.
There is some money for Border Services to help reduce trade backlogs at the border and for Foreign Services to have more and better Embassies which could also help with trade.
There was also mention of the ongoing support for Agri-Invest, Agri-Stability and Agri-Recovery programs which are just coming on stream following an extensive Fed-Prov negotiation. It will be critical to ensure we have a good safety net program in place now, for when the next downturn comes.
So, what wasn't in the budget for agriculture?
Some pieces that would have been beneficial might be an incentive to keep producer ownership in bio-fuels plants desirable to the corporate sector, an incentive for more twinning and passing tracks to reduce rail bottlenecks, a commitment to CFA's Brand Canada imitative where we would clarify all food labelling to ensure that consumers know what is actually grown in Canada when they are in grocery stores. Currently many food products come in from overseas, and because they are packaged in Canada, they are labelled product of Canada.
Overall, there was a little of this and little of that for agriculture, but no big gains or losses.