Leadership Panel on Viability

From CAPI Update, Winter 2010

The Problem: In Canada, government agricultural program payments cost several billions of dollars annually. The payments vary across the sector and over time but the demand for financial support is significant and seemingly "perpetual." In the face of lower-cost producing countries, Canada's position as a leading exporter is falling (down from 5th to 9th since 2002) and Canada's negotiating position in international trade continues to come under pressure. The economics of certain commodity sectors is facing severe strain.

The Opportunity: We need to consider changing the way we support the agriculture/agri-food sector. Demand for commodity foods will continue to increase in the coming decades, particularly as niche markets grow. Canada has the capacity to play a major role in both markets. But Canadian governments need to modernize the way they structure and fund their program models. Several policy issues need to be addressed, such as the affordability of government funding and the economic models and marketing structures that support Canada's agricultural sector. A viable sector means producer profitability that does not rely on "perpetual" government support.

Research Program: A series of short papers is being produced to clarify certain agricultural policy issues, such as the structure of farm incomes and the objectives of farm programs. In addition, CAPI is undertaking a set of more detailed papers, including research to examine farm performance through the clarity offered by disaggregating farm data. Our work will assess how the calibre of policy-making would benefit, or not, from better farm performance measures. CAPI will also assess the pertinent factors impacting farm competitiveness that should help shape future farm programs or policies. The research will also evaluate current farm income stabilization programs and establish a clear methodology for evaluating program successes in the future. With these results, CAPI will conduct workshops with stakeholders in 2010 to elicit feedback and produce policy options.