CFA concerned about possible increase in farm bankruptcies in Canada

The rising protectionist agenda across the world has made agricultural trade difficult between once-friendly trading partners. Farmers in Canada and the U.S. have felt the impacts of strained exports, but how their governments have recognized these challenges is different. Although both countries have faced financial challenges on the farm, U.S. producers across a broad spectrum of commodities have been propped up by Market Facilitation Program (MFP) payments. In Canada, there has been no such support in many of the same commodities, and the discrepancy is wearing thin with some Canadian producers and farm groups.

The Canadian Federation of Agriculture (CFA) tweeted, “US sees a 24% increase in farm bankruptcies this year, even after receiving $28 billion in subsidies from govt. CND farmers have the same struggles as US farmers, without any of the financial assistance. What do you think is going to happen to Canadian Ag?”

With a China deal somewhat elusive, or a slow build up if a deal actually happens, some U.S. farmers are already talking about an MFP 3.0 program. Not all lawmakers are onside yet, including Iowa Senator Chuck Grassley. According to Pro Farmer, Senate Finance Committee Chairman Chuck Grassley (R-Iowa) reportedly said the USDA should discontinue its Market Facilitation Program if the U.S. and China reach a trade deal soon, but only if any accord results in the massive increase in trade President Donald Trump has promised.

If the U.S. does institute an MFP 3.0, pressure for a Canadian program is likely to push higher. Up until now, the soybean industry has been the only sector asking for financial assistance, directly.

The Trudeau government’s announcement of market access compensation to Canadian dairy farmers back in September pre-election gained much criticism from farmers producing exportable commodities.

Earlier in 2019, RealAgriculture asked Canadian farmers on whether or not there should be a Canadian trade aid package and the results were in favour of aid for those who grow export-dependent commodities.

Where are we at in Canada? Although U.S. farm bankruptcies are up in 2019, according to a few Canadian financial institutions I talked to off the record, the numbers are substantially less, north of the 49th parallel at this point.

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