Midsummer reflections from APAS on state of Ag. Industry

By Tim Kalinowski, Staff Writer

Midsummer is a good time to think about some of the larger issues facing Canadian agriculture. There is more time to consider things, and the insanity of harvest has not yet come. For those out of touch with some of these issues because they are too busy with daily farm work, the Agricultural Producers Association of Saskatchewan (APAS) has got your back. APAS president Norm Hall recently made the trip across the border for a meeting in Calgary, and spoke with Ag-Matters about what’s what.

Hall says the issue with the biggest implications for farmers in Alberta and Saskatchewan right now is the continuing fallout from the catastrophic drop in the price of oil.

“There are large tracts in Alberta and Saskatchewan where either the oil companies are not paying their land rent (to farmers), or just paying 10 per cent, or else they have wells that aren’t producing real well so they just abandon them,” explains Hall. “When the companies go bankrupt either the government has to deal with them or the landowner deals with them. What we see is the whole company will go bankrupt and then they are just gone from the landscape.”

Hall says in Saskatchewan there are very few levers available to the agriculture sector to deal with this increasing problem.

“In Saskatchewan, we are lobbying the province to bring forward a Surface Rights Act update to make improvements, because our current Surface Rights Act dates back to 1968. In Alberta farmers are better off, they have the Farmers’Advocate Office to help with their problems. Other than that, there is not a whole bunch that producers or producer groups can do except keep squawking to the government and be in communication with the oil companies that are holding those leases.”

Hall says he understands oil companies are going through a tough time right now, but this does not justify the things he is hearing about from some Saskatchewan and Alberta farmers who are being left out on a limb.

“In my eyes, there is no excuse for (oil companies) to abandon their obligations. I would say you got responsibilities, and you should be living up to them.”

Another area APAS is monitoring carefully heading into this fall is the grain transport situation. While there seems to be no issues right now, and grain is moving well, Hall feels farm groups need to keep a sharp eye on the rail transport companies anyway.

“We have noticed there is a large crop coming in from the prairies, and as long as everything keeps flowing… Are we going to have the same happen as happened in 2013/14? Or is everything going to flow through? Have we learned anything? Year over year the railroads are down 225,000 cars. It just happens that grain is up 15,000 cars in total movement year over year. So grain has almost seemed to move at will this year. But if oil or potash (in Saskatchewan) comes up suddenly, we could have an issue. If they don’t come up, we won’t have any issues. It will have to wait to be seen.”

Hall say CP Rail registered a 16 per cent increase in revenue this year despite providing fewer cars and less transport capacity in western Canada. It is no secret how they have managed to do that: By making drastic cuts to staff and service.

“Sure it’s easy to get the engines out of storage, fire them up and get them going, but when you have laid off as many staff as they have in the last three years that’s a different story,” says Hall.

On the further horizon, APAS is concerned about the new Growing Forward 3 agreement scheduled to be brought in on April 1, 2018. Hall says the huge turnover in Canadian governments coast to coast the past two years has left little time for negotiations on substantial changes to the GF-2 agreement in time for GF-3, so APAS is focusing on AgriStability and AgriInvest funding.

“We are looking for some extra money or more money going back into business risk management programs,” explains Hall. “There were huge cuts to that on April 1, 2013 when GF-2 came into play. There were some unintended consequences to the changes that were made that put some portions of the industry at a huge disadvantage. We would like to see more money going into programs like AgriStabilityand AgriInvest. On the other side of the investment spectrum, we want to see more money going back into research, innovation and communications on things like social licence. Just making sure dollars are being put back into the places where there deficiences.”

There are obvious holes in these programs when it comes to alternative agriculture sectors, says Hall, (such as the beekeeping industry and organic farming), APAS would like to see patched.

“There is the limit put on the margins,” explains Hall. “In GF-2 they put cap on your margin through your elegible expenses. Some of the expenses included were fuel, fertilizer, chemical and seed. You look at a beekeeper, for example, they don’t use fertilizer, they don’t use seed, they don’t use much fuel and only some chemical. So that means their eligible expenses are on the floor; so there is not a lot of reference margin to be able to use in a disaster.”

According to Hall, there have been extensive consultations between the provinces and producer groups such as APAS. It’s the federal government, so far, that has been slow to come to the table.

“The federal government has not shown its hand at all,” confirms Hall. “We know sort of the general direction they want to go, but as far as a budgetary number as to what they are going to throw into this pot—there has been nothing put forward yet. I think they are wanting to guage where we are as much as we are trying to guage where they are.

“As for timing, the new program starts April 1 of 2018. It’s less than two years. They need to go through things, but there is not enough time to do any large changes; like doing a full rejig on AgriStability or scrapping it for a new program. There have been some alternatives thrown out there by the agriculture sector. Let’s hope the governments pick up on it. Right now some producers are falling through the cracks.”