Alta. aims to dial back ag spending

The Alberta government plans to pare back its spending on agriculture and rural development to about $1.14 billion in the coming year, down from its projected 2008-09 expenses of almost $1.4 billion.

That will include a net reduction of 91 employees, following both the province’s “value review” of the department and the establishment of the new Alberta Livestock and Meat Agency (ALMA), the provincial government said Tuesday.

But it’s also to include the new cattle price insurance program to be delivered by the province’s Agriculture Financial Services Corp. (AFSC) as part of Alberta Agriculture and Rural Development’s $473 million budget for insurance programs.

Overall, Finance Minister Iris Evans said the province has budgeted for $36.4 billion in spending in 2009-10, leaving a deficit of $4.7 billion after reduced revenues of $31.7 billion.

As a portion of that $36.4 billion in spending on a ministry-by-ministry basis, Agriculture and Rural Development comes in at 3.1 per cent, on par with Children and Youth Services and well below Health and Wellness (35.6 per cent) and Education/Advanced Education (25.5 per cent combined).

“We believe — as most private sector forecasters do — that we are in a period of a short-term decline,” Evans said Tuesday. “As energy prices and global demand for natural resources increase, we expect our revenues to begin growing again starting next year.”

In the meantime, however, Evans doesn’t expect the province to return to a surplus budget until 2012-13.

Ag spending

Specifically, Evans has budgeted for $1.139 billion in spending for Agriculture and Rural Development in 2009-10, which is up from the 2008-09 budget of $1.012 billion but below forecast 2008-09 spending of $1.399 billion. The 2009-10 budget includes $1.083 billion in operating expenses and $55 million in debt servicing for AFSC.

The 2010-11 and 2011-12 spending targets for the ministry are $1.139 billion and $1.135 billion respectively.

The $473 million budgeted for insurance programs in 2009-10 is to include the introduction of AFSC’s voluntary Cattle Price Insurance Program, the first of its kind in Canada. The program is to be funded from producer premiums and is expected to help protect cattle operations from market price fluctuations.

Another $347 million is budgeted for agriculture income support, including $137 million in provincial contributions to the AgriStability program.

The province also expects that its 2008-09 Farm Recovery Plan, which paid out $300 million in emergency aid to the livestock industry, will have been “the last ad-hoc assistance program for this sector.”

Beginning in 2009-10, the province said, ALMA is to be fully operational, with a program expense budget of $55 million and a focus on policy and programs to develop new markets, increase innovation and improve supply chain management in the livestock sector.

Restructuring due to ALMA will form part of an expected reduction of 91 jobs at AARD, bringing the ministry’s staff levels to about 1,660 employees overall.

Among related spending, the province’s new Land-use Secretariat, which supports Alberta’s Land-use Framework, will get double its previous funding for a 2009-10 total of $15 million.

The framework sets out a new approach for management of public and private lands and natural resources in Alberta, with the Lower Athabasca Region Land-use Plan, the first of seven regional plans to be developed under the framework, to be completed in 2010.

“Funding to implement the Land-use Framework is a priority,” said Ted Morton, provincial minister of Sustainable Resource Development, in a release. “With regional plans in place we will be in a good position to manage our future growth and development, and their impact on our landscapes and resources.”

Evans’ budget also includes a 2009-10 capital spending plan that calls for $7.2 billion in 2009-10 and $23.2 billion over three years for roads, health care facilities, schools and “other public infrastructure.”

Among other line items, the 2009-10 budget calls for Alberta’s tobacco tax to increase to $40 per carton, making it the highest provincial tobacco tax in the country in 2009.

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