Thank you, Mr. Chair and committee members, for this opportunity to be here to represent farm families across the country who are voluntary members of the National Farmers Union.
We support much of the analysis that was just given by our colleagues from the UPA. Much of it is very similar to our own analysis of the current situation.
I want to start by using a phrase that people have probably heard too much lately, and that is “climate change”, but I'm talking about the financial climate change that has really come into place when we're talking about farm incomes across the country.
In climate change terms, we've been through the five hottest years we've ever had in farm income, which means the five worst years we've ever had for net farm income in the country. This is coming on the heels of the previous 15 years, which were really negative years for farmers across the country.
We have distributed one page that has two graphs on it. In a nutshell, what the top graph is showing is that, over the past 20 years, Canadian farmers have created a farm gate wealth of two-thirds of a trillion dollars. That's not the retail value; that's the value that farmers sold that production for, the farm gate value. For that work, the farmers have kept exactly zero. The net income out of that two-thirds of a trillion dollars is zero.
What we are worried has happened, though, coming out of the 1990s, is that there were a series of business risk management programs developed as a result of the statistics that came out of the 1970s and 1980s. Our concern is that we think there have been programs developed to deal with the situation from the 1970s and 1980s, but not the situation that we've gotten ourselves into in the 1990s, and now the first five years that we've just come through.
Leading up to that period, in the 1970s and 1980s, when we first started to hear about things like the NISA program in the very late 1980s, it was still generally accepted that farm incomes were cyclical. They went down, but yes, they always came back and went up again.
Between 1945 and 1985, there was this tremendous range of farm incomes, but they were always positive and were always somewhere between $10,000 and $30,000, on average, right across the country. But that changed, starting in about 1985. They started this tremendous, almost constant, downturn. So that cycle that farmers used to be in disappeared. What we were left with, though, was still the generation of programs that were geared, tailor-made, to that cycle, but the cycle has disappeared.
That's the context we're starting from, and one of our concerns right at the moment is that in some quarters there seems to not be an acceptance that there's a farm income crisis. We don't have to go very far to find groups that will say in public that there is no farm income crisis. This is tradition now. We've had it for 20 years. Farmers shouldn't expect farm income, because they haven't had it for 20 years, and there are still farmers there. As long as they can find one farmer anywhere in the country who is still paying the bills, they say, well, that guy must be a good manager, and for all the rest, there's something wrong with their operations. So the first thing, I guess, that the National Farmers Union would be looking for from the committee is the acceptance that there actually is a net farm income crisis.
That brings us to the issue of the business risk management programs, and the way we're looking at it is that there are two ways of setting up those programs. There is a marketplace-funded business risk management program, and Mr. Friesen already alluded to the fact that supply management would fit into that category. We also see organizations, institutions like the Canadian Wheat Board, fitting into a business risk management plan that gets more money from the marketplace and distributes that money to the farmers. That's marketplace money that's business risk management programming.
Then there's the taxpayers' side--the $4 billion or $5 billion that has been transferred to taxpayers through the various business risk management programs.
We're thinking about the solution, and Mr. Friesen used the term “companion programs”. We call it more a suite of programs. There isn't one magic bullet that's going to turn this around. There are many programs that all have to be used. It wasn't one incident that created the farm income crisis for farmers.
If we want to look at the players around the farmers, a lot of them have been doing very well--the input suppliers, handlers, and retailers. It's not that we think they should make zero; we think they should make a profit and a decent return on investment. But if they can do that, why shouldn't the farmers be able to make a decent return on investment?
Gradually, over the last 20 years, we've seen farmers as a group essentially being nibbled to death by ducks, because every single player is just taking a little bit more out of the system--a few more percent here and there. Regulatory changes have occurred that add cost to farmers' business. It's just a little bit here and a little bit there, and over time we've seen the reduction to zero net farm income.
The solution to this is an integrated suite of programs that needs to be designed with a heavy reliance on cost of production programming. We say that because the margins on the farms have been reduced to such a level now that if the cost of production money isn't there quickly, the farmer gets behind the eight ball and can never catch up. If a payment comes from some program that was installed three years ago, it's just not going to help that farmer maintain and be able to pay the bills.
I'll close on the note that it's not fair or reasonable to think that the different provincial jurisdictions across the country can afford a 60-40 split on decent programming, on real business risk management programming. And it's not fair or appropriate for the federal government to unilaterally put in place programs without consultation with different provincial jurisdictions and then just expect that the jurisdiction will pick up 40% of the cost.
Thanks very much, Mr. Chair.