Healthy soil and sustainable growing

["Tradingpost" <tradingpost@gilanet.com>]

Corner Post #327
Farm & Countryside Commentary by Elbert van Donkersgoed

In the shadow of the crisis in beef production, the result of discovering
one case of mad cow disease, all of Canadian agriculture is coping with a
much bigger problem: the rising value of our loonie. Less than two years
ago, the Canadian dollar troughed at 62 cents U.S. There has been a 20
percent change and every indication that our loonie's value could continue
to climb to 80 cents U.S. and beyond. Assuming that the rule-making
procedure in the U.S. and at the World Organization for Animal Health
proceeds in good faith, we can look forward to borders opening to Canadian
cattle, sheep and other ruminants. That day cannot come soon enough. Even
so, open borders will not bring back the good cattle prices we left behind
on May 20, 2003. A new normal has emerged for Canadian agriculture.

Last month, at the Canadian International Farm Equipment Show, the Christian
Farmers Federation surveyed those visiting our display: "What impact does
the rising value of the Canadian dollar have on your farming operation?"
Participants said the bulking up of the loonie would lower the price of what
they will receive for just about every commodity: apples, beans, beef,
cabbage, carrots, cauliflower, celery, corn, goat cheese, flowers, grapes,
hay, horses, pigs, onions, soybeans, tomatoes and wheat. A number noted that
calves, cattle, sheep and dairy heifers would also take a hit once the
borders reopen. The only commodities not identified were chicken, dairy and
eggs - once again Canada's unique approach to managing the supply of these
products is providing stability for farmers without the need for subsidies
and other ad hoc interventions.

Survey participants also noted that they expect to pay lower prices for some
purchases: imports such as baler twine, breeding stock, cars, consumer
goods, farm machinery, fertilizer, fuel, horse trailers, magazine
subscriptions, machinery parts, material handling equipment, minerals,
pesticides, pharmaceuticals, tractors, and U.S. seed. A number pointed to
other possible savings: college tuition in the U.S., interest rates, travel
and U.S. holidays.

Will the lower cost of imports make up for the 20 percent lower return of
our exports? Participants were skeptical: "It will just increase margins for
middlemen." "Not much! Companies are not in the habit of passing on
savings." "It does not seem to lower my costs."

The new normal is already evident. In 2003, for the first time in a decade
and a half, Ontario's growth in agri-food exports stalled. Since May,
exports have been in decline. Remember 1991? Cross-border shopping soared
exponentially. The Canadian dollar had rocketed to 86 cents U.S.

It's time to redirect farming resources to produce for Ontario's
increasingly diverse cultural interests and replace some of the $12 billion
in agri-food imports.
__________
See www.gov.on.ca/OMAFRA/english/stats/trade/agrifoodtrade.html for
information about Ontario's agri-food imports and exports.

Elbert van Donkersgoed P. Ag. (Hon.) is the Strategic Policy Advisor of the
Christian Farmers Federation of Ontario, Canada. Corner Post has been heard
weekly on CFCO Radio, Chatham and CKNX Radio, Wingham, Ontario since 1997.
Corner Post has an email subscriber list of more than 3,000 and appears
regularly on @g Worldwide Correspondents at
www.agriculture.com/worldwide/correspondents/index.html. Corner Post is
archived at www.christianfarmers.org/commentary/Corner-Post.htm. To be added
to the electronic distribution list of Corner Post send email to
evd@christianfarmers.org with SUBSCRIBE as the message. To remove your name,
send email with UNSUBSCRIBE as the message.