It was interesting to note last week that as beef producers
were gathered at a conference in Calgary to hear a message that the recession
is coming to an end and there is great long term opportunity for the
agriculture industry, hog producers were holding a rally a few blocks away to
say if they didn’t get some help now they’d soon be out of business.
A couple days before those events, a vice-president of the
Royal Bank of Canada, and other speakers also told grain farmers at a field day
in Chinook, in eastern Alberta there is great opportunity ahead for
No one had a really good answer for one question from the
audience which asked ‘what are you supposed to do this year because it’s been
so dry and you don’t have any crop or feed for your cattle?” Having a good
marketing plan, at that very moment, isn’t going to help pay the bills.
The trouble with some of these bigger picture, or longer
term outlooks is they are probably true and accurate, but the real issue is
what to do about today. It reminds me of that old saying or joke “it is hard to
watch the eagles soar when you are in a swamp and up to your ass in
Grain farmers and beef producers have no control over a poor
growing season, and the hog industry has no control over a pandemic called the
H1N1 Flu, which unfortunately has knocked the hell out pork markets around the
I believe there is great opportunity for the agriculture
industry ahead. And I think most producers should be able to (and many do)
build enough flexibility or resilience into their businesses to withstand a
poor year, maybe even two poor years. But there comes a point when all the good
management in the world isn’t enough to withstand repeated battering from
outside, uncontrollable, unpredictable weather and market forces.
Should the government open the purse strings to bailout a
struggling agriculture sector?
Well it certainly dug deep to bailout some other industries that in my
mind didn’t deserve a hand. Their workers and other support industries didn’t
deserve to suffer, but the industry executives seem to be the ones who got
reserved seats in the lifeboats. The Canadian government is looking at a $50
billion deficit due to bailouts and economic stimulus measures, while the U.S.
government is looking at a staggering $1.8 trillion deficit to bailout and
stimulate it’s economy. I can’t imagine how much 50 billion dollars is, let
alone 1.8 trillion dollars.
I haven’t heard pork producers or any other sector ask for a
direct cash grant to help them weather the storm, but I think the government
should act speedily to put in place whatever programs are needed – loans, tax
deferrals, or whatever – to help the industry through this bog.
We can talk about all this future opportunity for the
agriculture industry, but that isn’t going to amount to much, if there aren’t
any farmers left to build it and enjoy it.
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