Mixed reaction to provincial budget for agriculture

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Good, but not exciting news. That seems to be the main reaction of farm groups to the latest provincial budget.

“Overall, it didn’t hurt us. It didn’t take any major things away from agriculture, and, I think there are some good parts to it,” said Wild Rose Agricultural Producers Association president Lynn Jacobson. But he added that “There are some needs within the ag community that the government will have to address.”

“Alberta’s budget as it pertains to agriculture looks to be good on first view,” said Western Stock Growers Association (WSGA) president Phil Rowland. “The WSGA compliments government on recognizing areas of pressure. Unfortunately, this (budget) is a band-aid approach to helping rural Alberta expand and prosper.”

The 2012-13 budget allocates a total of just over $1 billion to Agriculture and Rural Development. Some elements include an increase in AgriStability and AgriRecovery; increased dollars for research including $750,000 to fund new research greenhouse facilities in Brooks; a three-year, $444-million commitment to bioenergy initiatives, and $24 million to international marketing for Alberta commodities.

Individual farmers may benefit most from the government’s commitment to steady grants for irrigation rehabilitation, consistent funding for agricultural societies, and increased funding for wildlife compensation.

About $430 million, or almost half of the total budget, is destined for crop, hail and livestock insurance claims. While this number is down from the $474.26 million budgeted in 2011-12, it is in line with what is forecast to have actually been spent that year. Jacobson is pleased with the dollars being directed to insurance.

“It looks like they’re going to spend more time or money fixing up the programs. They are recognizing the variability, and we welcome that.”

At $226.29 million, ag income support spending including AgriStability and AgriRecovery will see a major increase in 2012-13, up from a forecast of $123.4 million this past year. The jump does not reflect new programs, Ag Minister Evan Berger said in a Call of the Land broadcast. Rather, the budgeted amount “is up because it is reflecting that we had a very healthy year… in the year we just went through, without a lot of over-the-top disasters or yield factors or price breaks. But we’ve increased (the budgeted amount) to maintain our ability to match as prices are climbing. Our payments could go up due to the fact of higher liability for the price structure that we’re getting to in all our commodities.”

Rural programs

Jacobson points out that dollars allocated to ministries such as Health are vital to rural communities. “Anything that can add to people maintaining their health will help them stay on their farms longer.”

Deputy Premier Doug Horner said in a a Call of the Land broadcast that the budget will provide more basic infrastructure for rural Alberta, including health care, broadband Internet, RCMP presence and an increase in the Municipal Sustainability Initiative fund.

Jacobson said that while the government has talked about spending some money to help prepare producers to handle marketing challenges after the end of the wheat board monopoly, no funds were designated. “There’s a lot of uncertainty out there. If the government could address those problems, that would be money well spent. So far, the government doesn’t have any more answers than we do.”

Jacobson noted that provincial and federal governments may have to assume some of the board’s former roles such as fighting trade challenges or pressing for better rail service.

He also said that while the budget provides funds for new infrastructure such as research greenhouses, programs in the facilities need ongoing support.

“The government needs to commit to the human resources required to operate the different programs, such as scientists, technicians and others, unless they are building the infrastructure to turn over to private industry,” Jacobson said.

Better business climate

“What we need is to have a business climate in Alberta that allows agriculture and other businesses to prosper, not government propping up rural Alberta,” said the WsgA’s Rowland. “This concept would create opportunity to profit and remove the need for government assistance.” He cited a proposed hog-processing facility slated to be built just across the border in Shelby, Montana, is an example of what needs to happen in Alberta. The facility, which will likely process about 800,000 hogs annually and employ as many as 500 workers, is being built primarily to service the Chinese market, and Chinese importers are already lined up to purchase the pork.

“The Alberta and federal governments risk wiping out the Alberta meat sector due to high regulatory cost and poor trade policy. At the same time the government is crowing about deals with China, we are losing a hog plant to the U.S.,” Rowland said. “We risk the same happening in the beef sector. Just last week, the Longview Beef Jerky Plant closed — the direct result of regulatory burden.”

Rowland said, “Rural Alberta wants to contribute and not to need to be propped up by the government. To do this we need a positive business environment… We do not, however think this can be done in Edmonton alone. This is a task that needs to be built with grassroots consultation.”

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