Mr. Speaker, it is an honour and a privilege to rise in this House this evening and speak on the emergency debate on agriculture. Mr. Speaker, I would like to thank you for granting that debate last Friday.
I would like to split my time with our agriculture critic, the hon. member for Brandon—Souris.
I am certain everyone in this House is aware that there is an agriculture crisis in Canada. That crisis is very real and it is with us today. It has been with us for the last couple of years in the agriculture community and we expect it will be here tomorrow. It will take some resolve on the part of this government. It is going to take some resolve on the part of the minister of agriculture and some resolve on the part of the finance minister to find the means to attack this problem.
Several international factors have combined to threaten many parts of Canada's agriculture industry. The huge support payments of the European Community and the U.S. government's support to farmers combined with the Asian financial crisis have had a devastating effect on the Canadian agriculture community and the rural way of life across Canada.
In 1997 net farm income fell 55% nationally. In 1998 farm cash receipts in western Canada are down drastically. There is a crisis in the hog industry that is affecting every major hog producing province, provinces like Quebec, Manitoba and Ontario. To add to this problem, the agriculture industry in Nova Scotia is reeling from two years of drought that have coincided with significant cuts to government support programs.
Many in the agriculture industry feel that farm safety nets will not be strong enough to protect Canadian farmers from further drops in farm income.
Some statistics are worth repeating. I am sure before the evening is over, we will repeat this one several times. However, I will say it one more time because I want to stress the importance of this. In 1997 net farm income fell 55%. That is half the net farm income gone. It is impossible. It is a concept that most of us in small business have a very difficult time and a very difficult job to grasp. In 1998 farm cash receipts in western Canada are down again and there are concerns that the farm safety nets will not hold.
Canada ranked second last in the Organization for Economic Co-operation and Development for government assistance to farmers. Canada's producer subsidy equivalent is 2%. The United States is 16% and the European Union is 49%.
Our farmers do not have to take a back seat to anyone in the world. They can compete on a fair basis with any farmers anywhere in the world. However, when farmers and producers in the United States are getting a 16% subsidy and farmers and producers in the European Union are getting a 49% subsidy, it makes it very difficult for our farmers to compete on an even footing.
It is not sensible for anyone in this House to think the European Union will drop its subsidies in the short term or that the United States will drop its subsidies in the short term. The only sensible train of thought taken from that would be to support our farmers with the same type of subsidy in the same type of support the Americans are giving to their farmers and the same type of support the Europeans are giving to their farmers.
The Asian crisis has had a significant and dramatic effect on farm incomes. To combat the Asian crisis the United States recently announced an additional $6 billion in support bringing its total in excess of $14.5 billion U.S., which is $22.2 billion Canadian, for 1998 alone.
It goes on and on. Somehow we have to come to grips with the fact that the farm situation in Canada is in a meltdown. Thousands of farmers are facing bankruptcy and the NISA accounts simply do not have enough money to protect them. It is incumbent upon the Parliament of Canada to find some solution to this problem.
The Asian crisis has aggravated this problem. At the same time the European Union has aggressively pushed production over the last two years, despite falling wheat prices. The European Union is providing direct support for grain at $175 per acre of wheat grown. The EU is intervening to support the floor price of grain with intervention support prices of $205 Canadian per tonne. The EU export subsidies are $55 Canadian per tonne for wheat, $119 Canadian per tonne for barley and $137 Canadian per tonne for malt. A European farmer will not receive less than $5.58 per bushel. Our farmers are receiving somewhere in the range of 40 cents.
We have to recognize this as a major problem and a major affront to the Canadian economy. We have to come up with some type of support program to protect our farmers and to help them in situations like this.
Canada's prime farm safety net, the net income stabilization account, was developed by a Progressive Conservative government as a rainy day account whereby farmers in good years could put away up to 2% of their profits per year, which is not a huge amount of money, and have that amount matched by the federal and provincial governments. The income in the account could be drawn upon during poor years. Farmers have started to withdraw money from their NISA accounts. For a six-month period in 1998 withdrawals increased by 70%. There is currently $2.5 billion in the NISA account.
Other safety net measures include crop insurance and companion programs like advanced payments for crops. The federal government contributes $600 million and the provinces $400 million to the total safety net structure. That is not enough. It is inadequate.
Since 1993 federal and provincial government farm support has decreased by more than 60%. Farmers are looking for a long term commitment from the federal government for support in good times and bad. Economists have estimated that Canadian wheat farmers are receiving less than 40 cents a bushel in direct support from the Canadian government. How can we compete against countries that give $2.60 and countries that give up to $5.69? It cannot happen.
I would like to draw upon a few facts which will be on record for the House and for members of the other parties who I hope will be supporting the debate tonight.
The Progressive Conservative Party has had a very positive record for assisting Canadian agriculture during hard times. Between 1984-85 and 1988-89 crop and income insurance totalled $21.7 billion. We established a special Canadian grains program to offset the effects of low grain prices caused by the trade war between the European Union and the U.S. and $2 billion was paid out over two years. Between 1988 and 1993 $800 million was paid to Canadian farmers to offset losses from drought through the Canadian drought assistance program.
The PC party has stated that the federal surplus should be utilized in the following manner: one-third for debt reduction; one-third for tax relief; and one-third for government spending. The current farm income crisis makes it necessary to increase spending in this area.
Farmers need a long term commitment on farm safety nets. Currently the minister of agriculture is only negotiating a one-year extension with his provincial counterparts. Farmers need assurance of the government's ongoing commitment to a national farm safety net program. Farmers need a national program that is consistent from east to west and which is available to all producers. The assistance programs must be delivered equitably and fairly.
In the short time I have left, I would like to make a plea to the members of the Reform Party that they support this emergency debate and that they understand the crisis. Many of the members are from western Canada. They also understand that in the past we spoke as a party with a strong united voice for the producers of western Canada.