Grain farmers were struggling before, but now they are really struggling, according to the President of the Grain Farmers of Ontario (GFO).
Markus Haerle, who farms near St-Isidore, said the market for various grains is depressed due to the COVID-19 pandemic. He estimates that due to less motor vehicle travel, the demand for gasoline has decreased, which has led to a significant decline in demand for ethanol, the grain alcohol used as an additive in gasoline.
Cuts to livestock production, due to less demand for meat from the restaurant industry have resulted in a drastic decline in demand for grain used in feed.
Although flour has sometimes been difficult to find on supermarket shelves due to increased home baking, the demand for wheat has also declined due to sharply reduced demand from the restaurant and bakery industry. Haerle estimated that demand for flour has been reduced by 30 to 40 per cent.
As an example of the price being paid for grain crops, July wheat futures were down five and one quarter per cent at $5.15 and a half per bushel on June 1. September wheat futures were down five per cent at $5.18 and a half per bushel on June 1. Haerle said that the pricing situation is complicated for Canadian grain farmers because the prices are set by the Chicago Board of Trade in the United States.
Grain farmers in the United States have experienced the same depressed market conditions, but the federal government there has provided generous subsidies to farmers to get them through the difficult times. Haerle said that if he was a farmer in the US, he would have received $100,000 from the government. He said that the federal government in Canada needs to compensate farmers in a way that makes it easier for them to compete on the world market with their US counterparts.
“We are not looking for a handout,” Haerle noted.
The GFO wants the federal government to begin financially supporting the Risk Management Program for grain farmers that is administered by the provincial government in Ontario by diverting funds that currently go to the Agri-Stability programs.
Haerle said that most existing federal support programs require farmers to pay back the amount they received the year after they made use of the funds. He said that the economic recovery from the COVID-19 pandemic will take longer than that.
“Everybody will be financially stressed for years to come,” said Haerle.
Farmers also do not usually receive payments from federal programs until a year passes from the time they apply. Haerle said that farmers have often lost their businesses by the time they receive any money. He compared it to a homeowner not receiving an insurance payout for a minor fire because the entire house did not burn down.
Haerle said that new forms of compensation could also benefit poultry, beef, sheep, and veal farmers who have also seen demand decrease due to COVID-19 and supply interruptions due to outbreaks at meatpacking plants.
He noted that grain and oilseed farmers in Ontario have already been hit hard in the past three years due to trade disputes with the US and China.
Haerle said improved government support is necessary in order to keep Canadian-produced grain products competitive. He does not want food retailers looking elsewhere for quality products.
“Prime Minister Trudeau is not taking this seriously,” Haerle said.
He thinks the Prime Minister is ignoring the issue because he does not consider farmers as an important bloc of voters who are crucial for his re-election.