Mr. Speaker, thank you for your prudent ruling. I am sure that members of all parties who individually supported your ascendancy to Chair are in fact congratulating themselves for their good judgment and your good judgment. We appreciate that.
Farming is said by some to be a way of life but it is also a business. No one knows better than Canadian farm families today that the price of this business has often been bankruptcy. Over the past year prices have plummeted. Farmers are facing the prospect of not being able to put seed into the ground. They are facing many challenges.
Let me say from the outset and make it very clear that I believe Canadian farmers are as innovative, as hardworking and as entrepreneurial as any in the world. In fact, Canadian farmers can take on the world and feed the world and do it on a competitive basis.
Canadian farmers believe this too, but the fact of the matter is that our farmers are competing in an artificial field, competing against subsidies in the United States and in Europe that are artificially high. Everything is skewed against our farmers. They are asking for the playing field to be levelled. In fact, because of the field not being level and because of the federal government's neglect, it is as if the federal government has tied the hands of our farmers and hobbled their feet. It is as if the government has put a 100 pound weight on their backs, thrown them into the international race and is expecting them to keep up. That is unrealistic and it can and needs to be changed. However, the federal government does not want to change the rules to give our Canadian farmers the level playing field they need and that is what this discussion is all about today.
Add to this weight that farmers already carry because of government inaction an unrealistic tax regime, not just for farmers but for agriculture businesses that would like to expand opportunities for farm products, and add to that Agriculture Canada user fees, and we see the weight that has been unrealistically placed on the backs of our farmers.
Whether we are talking about growing grains, oilseeds, corn and soybeans in Ontario or about wheat in the west or any of the ridings producing farm products across Canada, farm incomes have fallen severely in the last three years. The projection is that they will continue to fall. This is a very serious message and it is a very serious crisis that our farmers face right now.
It has been estimated that farm income for grains and oilseed producers is projected to fall as much as 35% from the five year average in the year 2000. That is a drastic and unbearable drop. It is important to note that the five year average already includes two years of disastrous commodity prices. This level of income is not sufficient to sustain the agriculture industry in Canada. Years of neglect by the federal government has resulted in the need for an immediate emergency compensation package. We will talk about the other things that also need to be done, but this compensation package is the most pressing issue for agriculture today.
We believe the situation is so severe that we have called for an immediate emergency package of at least $1 billion in new federal spending. It is important to point out that this must be additional spending from the federal government, not just a reallocation of spending that has been promised and in fact not delivered. This dollar amount is based on clear estimates of what we calculate to be the hurt Canadian farmers have been carrying and the damage they face, mainly as a result of the unrealistic subsidies from the United States and the European market.
Some of our political opponents would like to say that the Canadian Alliance is not bringing forward a consistent policy because we call for free trade on the one hand yet demand an emergency package for farmers on the other. However, let me be very clear that this is absolutely consistent with the Canadian Alliance position. Our agriculture policy states that “we should only reduce Canadian farm support in conjunction with other countries”. That is a direct quote from our policy.
This is far different from what the Canadian government has done since it signed the general agreement on tariffs and trade. Support for European and U.S. farmers has not changed significantly from the time of the GATT agreements. We saw support for our farmers slashed and drastically reduced. We cannot expect our farmers to fight this, and not just against farmers from the United States and Europe because those farmers are backed by the might of the treasuries of Europe and the United States. This is an unrealistic expectation.
Subsidies provided by our trade competitors to increase their own agriculture production are the principal cause of this current farm income crisis in Canada. A lot of Canadians would be surprised to know that in 1999 European wheat farmers received 58% of their income from government. In 1999, U.S. wheat farmers received 46% of their income from government, while Canadian farmers received only 11% of their income from the government in 1999. This is a very dramatic change in terms of what Canadian farmers face.
In 1997, U.S. support for its oilseed producers amounted to only 4% of income. However, we must look at what happened in just two years. By 1999, that support had ballooned to 25% of U.S. oilseed producers' income. During the same time, support for Canadian oilseed producers remained essentially unchanged. These are drastic comparisons. It should be no surprise that the U.S. is now forecasting a fifth year of record soybean production while the value of Canada's soybean crop continues to fall dramatically.
Before the last GATT round of trade negotiations were completed Canadian farmers were basically at par with U.S. subsidy levels. After the round was completed, the gap between Canadian and U.S. subsidies began to grow and that put added pressure on our farmers. While Canadian farm support has fallen since the accord, support for U.S. farmers has actually returned to pre-GATT levels. Canadian farmers were actually worse off after the last round of trade negotiations.
This gap between support levels for Ontario and those for U.S. grain and oilseed growers is actually equivalent to about $63 an acre for a typical farm growing a mix of corn, soybeans and wheat. This means that the cost of achieving equity with U.S. farmers would be about $300 million per year for Ontario and about $1.5 billion nationwide. These are real costs. These are measurable effects. Our farmers, as I have said, are some of the most efficient producers in the world, but they are competing against European and U.S. treasuries all on their own.
This serious drop in revenues, which has been caused by these increasing foreign subsidies, has also been compounded by skyrocketing costs. It is not as if farmers are just fighting subsidies. Costs are rocketing through the roof.
There are not many people outside the farm community who know the degree to which farmers are impacted by energy costs and the significant increases there. The cost of getting their crops into the ground in the spring and of harvesting in the fall is highly dependent on the cost of diesel fuel, as is the cost of getting their product to market. Then we have the ballooning cost of fertilizer which uses natural gas as a key ingredient. All farmers here today know what has happened to fertilizer costs, but I wonder if Canadians know of the increased cost because of soaring energy costs.
What has the federal government done to assist in those energy costs? It has sent cheques to students and to prisoners in jail. I think it is time that the government looked at the energy costs and the increases being carried by farmers.
The current programs have failed. The 1998 agriculture income disaster assistance program continues to hold back a huge percentage of the money that was promised to farmers, with 8,700 claims from 1999 that have not even been processed. We say it is time to get that money off the cabinet table and onto the kitchen tables of family farms.
Some have said that the $500 million the government has just promised is a lot of money. We can make the analogy of putting 500 litres of fuel into an airplane so it can cross the ocean, but it needs 1,000 litres to make the trip. There is no point in even filling the plane if it is going to crash into the ocean. That is what we are talking about. Farmers cannot even get the crops into the ground if they know they cannot complete the job.
This must be done and it must be done immediately. We are talking about an industry that is 8.5% of the Canadian gross domestic product and employs 1.9 million Canadians. In Ontario, it is the number two industry.
I want to add that we must not leave unattended the other things that must be done. I just want to say in closing that once we get this emergency help we must aggressively attack foreign subsidies, we must remove the 4 cent per litre federal excise tax on farm fuel, we must encourage more value added processing with a realistic tax regime, we must give all grain farmers marketing choice, especially those in western Canada, and we must reduce farmers' costs by modernizing the grain handling and transportation system.
We demand this action. We demand that the government move on this emergency request and that it do so now.
Mr. Speaker, I will be splitting the balance of my time with the member for Selkirk—Interlake.