Reuters / Wednesday March 22, 2000 / By Randall Palmer
OTTAWA (Reuters) - Robert Leach is a fairly burly man, but his voice trembled and his eyes were moist as he described how the bank might soon foreclose on his beef and grain farm.
"I've never been so disgusted, sickhearted, brokenhearted, fed up in my life," he said this week, standing on the steps of the Canadian Parliament wearing a black John Deere jacket.
Leach was one of several farmers there to welcome Nick Parsons, who had driven his Massey Ferguson combine harvester 3,000 miles (4,800 km) from British Columbia to try to deliver the message that the family farm is now an endangered species.
Farmer after farmer described how they were finding it impossible to make ends meet as a result of weak commodity prices, steadily increasing costs and reduced government subsidies despite support in other nations.
Theirs is a tale that has major implications for small communities across Canada, for entire provinces where farmers are the backbone of the economy -- and ultimately for the country's economy if a major sector faces such deep problems.
"The farm's for sale, I sold the combine last year, I'm done. The fourth generation on a farm -- my family's been here since 1833," said Leach, who farms 500 acres (200 hectares) in Cobourg northeast of Toronto.
MORE GOES OUT THAN COMES IN
For the last four years, he said, his wife made C$40,000 ($27,000) a year outside the farm but he consistently lost more than that in his agricultural operations, so their debt was mounting and becoming unsustainable.
In fact, Leach said, his credit rating was so bad he could not even get a credit card at the Canadian Tire hardware store chain. He said he sold his combine to service his debt but cannot find a buyer for his farm -- and his creditors are closing in.
It is the same for Saskatchewan grain farmer Lloyd Pletz, who expects to lose his 1,000-acre (400-hectare) operation to the banks this spring.
"We're all facing bankruptcy and going broke. Everything I've worked for for 25 years is gone and lost. Thank you, Mr. Chretien," Pletz, 45, said, referring to Canadian Prime Minister Jean Chretien.
Pletz has been trying unsuccessfully to bail out before the banks foreclose, but he asked: "Why would somebody want to buy a farm when you can't make any money on it?"
In his case he lost C$65 per acre last year, C$65,000 in total. Chretien announced C$240 million in special funding last month for Saskatchewan and Manitoba, Canada's breadbasket, but Pletz reckoned this would amount to only C$5 per acre for him, not enough to cover the interest on his losses.
SUBSIDIES DOWN
A middle-size power like Canada can do little to affect global prices or costs, but it does have control over subsidy levels and subsidies have been cut roughly in half, even after special aid announcements this year.
Federal agriculture official Douglas Hedley said that in the late 1980s and early 1990s, at the height of a subsidy war with overseas competitors, Canada was doling out some C$2.6 billion a year in farm subsidies, including C$560 million in railroad support to producers and C$220 million in dairy aid.
Some governments tried to wean farmers off subsidies in the mid-1990s; in Canada's case the need was particularly severe because of fiscal deficits that had damaged the national credit rating. Subsidies now have been reduced to C$1.4 billion with no assurance that even that level will be sustained beyond this year, although Agriculture Minister Lyle Vanclief hinted on Monday that some more help might be on the way for this year.
"We're always looking at ways in which we can help the industry. We have found a number of ways and hopefully we're not done yet," he said after meeting Parsons, the farmer who drove across Canada at 10 miles per hour (15 kph).
Vanclief was an Ontario farmer who got out of the business because he found it economically difficult, and he has said he did not want subsidies keeping inefficient operation going.
But Pletz scoffed: "There are no inefficient farms anymore. They were weeded out last time there was a subsidy war in the 1980s. We've all diversified."
Parsons brought a bushel of Canadian wheat into his meeting with Vanclief to dramatize the farmers' battle with low commodity prices and high costs. He said the bushel would make 57 loaves of bread and in the 1970s a farmer would get a price equivalent to nine loaves. Now he takes home only three.
"Why should we be on 30-year-old prices with 2000 costs?" he asked reporters, his green overalls partly covering his worn-out boots. He had not reached the point of bankruptcy yet, he said, but he was having to use his savings to stay afloat.
"We're just going downhill very fast and we're using all our resources and soon there'll be no resources left," he said. "And soon the family farm will be a thing of the past, and that has to be stopped before it happens.":
