Mr. Speaker, I will be splitting my time with the member for Dufferin—Peel—Wellington—Grey, also known as the minister of feathers. Anything we want to know about feathers, that is the hon. member to speak to.
I am only the second urban member to speak on this. I want to acknowledge at the outset, as one of the hon. members asked me opposite, what in heaven's name does an urban member have to say about a farm issue.
The last farm exited Scarborough East about a generation and a half ago. It was probably my father's farm. At one point we were hog farmers and we followed that up subsequently with being market gardeners. I vividly recall doing rhubarb roots in November.
It was an awful experience. One did not have to do this for very long before realizing there was another way to make a living. The novelty of doing it wears off after a while.
I am actually the first generation not to own land and make a living from it. Some time during the next month I have to make a decision as to whether we will sell the family farm.
I can say unequivocally that the people of Scarborough East are not opposed to paying a fair price for the food they consume from Canadian farmers. That in some respects is the issue. While I speak from the vantage point of an urban member and a lapsed farmer, I want to address the issue of whether this is a crisis or a disaster as speaker after speaker has said.
I draw attention to the overview of the 1998-99 farm income forecast of NISA balances of October 30 prepared by the Minister of Agriculture and Agri-Food. If we look through the numbers for certain provinces one has to ask where is the crisis. The cash receipts for 1998 for the province of Ontario will be $6.7 billion, up approximately $400 million from the previous five year forecast. Income in 1998 will be the highest it has been in years previous. The average for the years 1993 to 1997 is $415 million. This year it will be $625 million for the province. The net income will be $674 million, up considerably over the $540 million average for the previous four years.
Hidden in the numbers are some sectoral problems, particularly in the area of hog production. If we look at the numbers there is a scheduled fall-off of about $270 million in one year. It will be concentrated in one sector. I believe that is where the crisis is.
As we move further west it is clear that the crisis gets deeper and deeper. In Manitoba the net income over the previous four years was $287 million. This year it will be $143 million falling down to $134 million, something in the order of a 40% fall-off from previous year averages. Then if we go further west to Saskatchewan the numbers become quite dramatic. The total net income for the average of 1993 through 1997 was $715 million. This year it will be $83 million. Next year it is projected to be $72 million. This is estimated to be something in the order of a 70% drop-off from the previous five year average. Clearly there is a crisis and an issue of great difficulty to individual farmers.
The numbers do not lie in these instances. There is a serious meltdown over the three provinces of Saskatchewan, Manitoba and Prince Edward Island. It is clearly directed to two sectors, the grain sector and the hog sector.
The question is whether the government should be panicked into a response. There are a number of serious issues among farmers particularly in Manitoba and Saskatchewan. The grain and hog sectors are very hard hit. There will be spill-overs into other areas and other sectors. There are vigilante people in the United States who have decided to take the law into their own hands and block access to markets. However, should the government panic as suggested by some members opposite?
Apparently the Reform Party's solution of tax cuts is the panacea to fit all evils. This is one idea that fits all issues. Tax cuts will not be too terribly useful to a farmer who has no income. Under the circumstances a tax cut is a meaningless solution.
The NDP, on the other hand, described this crisis as something comparable to the dirty thirties. I suggest that is hyperbole and not something that necessarily needs to be addressed. Its solution is to get into national programs and to look at subsidies. But if we look a little more carefully at subsidies, they do not really cut it. If I am reading correctly, the producers subsidy equivalents produced by the Minister of Agriculture and Agri-Food show that in the pork area where we subsidize the most we have the greatest problem.
Similarly, however, if we look at the wheat area where we subsidize the least, second only to Australia, that is also an area of problems, similarly with corn where we subsidize very little. We subsidize very little in barley and yet we still have problems in those areas.
It is quite clear from the statistics that even where we subsidize heavily there is no correlation between prosperity of farmers and absence of prosperity of farmers. Subsidies is not an area in which the government should go or be encouraged to go.
The government has taken something of a measured response to this issue. I suggest it is the right path to pursue. Its first response was with respect to the NISA program, a simple rainy day account to which farmers are entitled to contribute in the good years and followed up with a contribution by the government. This is the time to draw, and we heard the Minister of Agriculture and Agri-Food suggest the ability to draw will be eased in this situation.
The second area is crop insurance, also a voluntary program. It offers risk protection to agricultural producers who contribute one-third of the cost of the program. It is estimated that $430 million in direct payments will go to farmers this year.
There are a number of other programs into which the government enters along with the provincial government and I need not repeat those.
The minister has been meeting with representatives of financial institutions in order to mitigate the requirements of financial institutions and orderly programs with respect to debt management.
All these are measured and appropriate responses to a serious issue. So it is my view that the Government of Canada has shown its concern about the farm financial situation and realizes the sense of urgency and importance. This is why farm income is one of the priorities now being considered by cabinet ministers. The Minister of Agriculture and Agri-Food has kept his colleagues and government informed of the situation and is moving us toward a reasoned and measured solution.
No cause for panic. No cause for disaster. No cause for hyperbole. No cause to describe this as another dirty thirties revisited, but rather a measured and reasonable response.