Mr. Speaker, I take the opportunity to enter this debate to provide some of the details on the government's response to this very serious financial situation facing Canadian farmers.
I feel very strongly about this issue for two reasons. First, in my riding of Waterloo—Wellington approximately 30% to 35% of the wealth generated is as a result of agriculture and agribusiness. Second, I still live on the family farm and therefore have firsthand experience about what it is like in this kind of situation. It is very important that we detail it in an effective and progressive manner and that is precisely what we are doing today.
While overall the agriculture and food sector is strong and makes a significant contribution to the Canadian economy, the government knows very well that the past year has not been an easy time for many of our producers and farmers. As the hon. Minister of Agriculture and Agri-Food explained recently, Canadian farmers encountered problems last fall when the prices in the Asian economy hit North America. That situation was compounded by declining commodity prices, a low Canadian dollar and unusually difficult situations that occurred, especially the flood and drought conditions in certain areas of the country. All these things combined to make for a serious impact on the income of many producers, particularly those in grain, oilseeds and hog operations.
In response to that situation the government moved to the aid of Canadian farmers by introducing the agriculture income disaster assistance program, AIDA. Funded 60% by the federal government and 40% by the provinces, AIDA is providing $1.5 billion over two years to those farmers in need. That funding is in addition to the $1 billion the federal and provincial governments contribute each year to the safety net programs, including crop insurance and the net income stabilization account which cushion farmers during difficult times, and those programs which invest in marketing research and other initiatives which serve to strengthen the sector.
Working closely with farm organizations and farmers themselves, the federal and provincial governments designed AIDA to be a national program which would be as inclusive as possible, open to all farmers in all commodity areas in every region of Canada.
AIDA uses an individual producer's revenue and expense information from tax returns to calculate payments. The applicant's gross margin, that is, the allowable revenues from all commodities minus allowable expenses, is compared with the average from the three previous years to determine the amount of assistance available through AIDA. The farmer is entitled to a payment that brings his or her income up to 70% of the previous three year average.
AIDA was also designed so that governments could offer assistance to new or beginning farmers. That is crucial because we need to help our young people in this regard. Special procedures were put in place so that producers who had just started were able to apply for the program even though they may not have had the historical information necessary for the calculations.
AIDA has proven successful in helping Canadian farmers to withstand the current crisis. The numbers speak for themselves. Up to October 20, over 54,000 applications had been received. More than $220 million is now in the hands of more than 16,000 farmers across the country, with average payments amounting to about $14,000 per producer.
Saskatchewan is perhaps the province most affected by this crisis. I was in Saskatchewan this past summer and saw firsthand the kinds of situations the farmers are facing. More than 6,800 farmers in that province have been paid over $72 million. In Ontario where the provincial government is administering the program, more than $61 million has gone out to 4,200 producers.
The impressive number of applications means that Canadian farmers will use most, if not all, of the $600 million available to deal with reduced incomes in 1998. This money will ensure that farm incomes for 1998 are brought close to the previous five year averages.
In a move to ensure cash continues to flow to those farmers in need, the government has also made advance payments available from AIDA 1999. This allows farmers to get 60% of their estimated entitlement without having to wait to file their income forms next February. A total of $900 million in funding is available in 1999, the second year of the AIDA program.
In provinces where the Government of Canada is delivering the AIDA program, Saskatchewan, Manitoba, Newfoundland and Nova Scotia, application forms for 1999 have been available since the beginning of September. I encourage all of those who need money soon to submit an application as quickly as possible.
There are those in the opposition who want the government to throw out this successful program and replace it with an acreage payment. Some on the prairies are demanding up to $80 per acre. The Government of Canada has not and will not implement such a program for three very good reasons.
First, acreage payments would go to all the producers regardless of need. This would not be fair to those who have suffered from some of the worst declining market conditions for a long time. Again the AIDA program is targeted at those in need.
Second, if we were to cover all land, an $80 per acre payment would cost up to $5.2 billion in Saskatchewan alone. To be fair, the payment would not just be offered to Saskatchewan producers.
Third, any ad hoc programming that is not disaster based and that does not treat all farmers equitably would violate our international trade obligations. If we were to implement this type of program we would be subject to countervail activity from our major trading partners, especially from the United States. The government cannot act irresponsibly in this regard and it will not.
AIDA is trade friendly because it treats all farmers in financial need equitably regardless of what commodity they grow or what province they live in. However the Government of Canada realizes that AIDA is not working for everyone. We realize that some producers have had several back to back years of low income, primarily due to repeated drought or flooding conditions. It is for this reason that the minister's national safety nets advisory committee was asked to recommend changes for the second year of the program. That advisory committee incidentally is made up of representatives from all the major farm commodity groups. The government is now considering its recommendations and will proceed accordingly.
The Government of Canada is committed to Canadian farmers, as well we should be and as we are. We are working to improve conditions for producers on many fronts including in the upcoming World Trade Organization talks where we will put forward a strong position which represents the broad trade interests of the entire agriculture and food sector.
We will continue to support farmers with effective and flexible safety nets. Dialogue continues with the provinces and farm groups on options for the long term renewal of a safety net package and a permanent disaster program. We will continue as we should to push for changes on the international front to level the playing field so that our farmers can compete on the same footing as their American and European counterparts. World Trade Organization talks in Seattle in December will be a major stepping stone toward our goal of subsidy elimination.
We will continue to invest in research and development so that the industry will be further strengthened by adopting new technologies which enhance food production and help the industry to develop new products and technologies that allow new uses to be made of existing products. In addition we will continue to support diversification in an effort to foster self-reliance and improved competitiveness.
All of our efforts will result in a strengthened agri-food sector and a strong and vital rural Canada. That is what all of us on the government side are working toward. We think it is important. We understand the importance of rural Canada to this great country of ours.
As the Speech from the Throne indicated, this government is committed to building a higher quality of life for all Canadians. That includes helping the agricultural sector to deal with this very difficult income situation. We know that AIDA has made a difference and has made significant contributions so far and will continue to do so in the months and years ahead.
I applaud the government. It is appropriate that we let it be known to Canadians wherever they may live in this great country of ours that is the position of the Government of Canada.