U.S. farm bill irks Canadian ag retailers

The passage of the U.S. government’s US$290 billion farm bill guarantees not only more subsidies for wealthy U.S. farmers, but tax breaks and grants for U.S. ag input retailers that their Canadian competitors can’t match, two Canadian groups said Friday.

The Canadian Association of Agri-Retailers (CAAR) and the Grain Growers of Canada (GGC) warn that the U.S. bill will hand their U.S. counterparts a new competitive advantage.

The bill, which includes USDA’s food programs for schools and the poor as well as land stewardship programming and other initiatives, also gives U.S. ag retailers “substantial tax credits and grants for security of essential crop nutrient and protection products,” CAAR said.

Both the U.S. and Canada have sought to tighten security of certain chemicals such as ammonium nitrate fertilizer, citing the use of common chemicals in terrorist attacks overseas and in home-grown attacks such as the 1995 Oklahoma City bombing, which relied on ammonium nitrate.

Another fertilizer, anhydrous ammonia, is often an ingredient used by illegal drug dealers in the “cooking” of crystal meth, and has been known to be stolen from tanks either on farms or retail sites.

New measures, including a ban on the resale of ammonium nitrate and registration, record-keeping and storage requirements for its retail dealers, take effect in Canada on June 1.

Operational costs

“Recent security codes and regulations are strapping agri-retailers
at a particularly bad time when operational costs are already at an all-time
high,” the association said.

“Incurring further expense will either result in higher input prices to
farmers or limited product availability due to entire product lines being
dropped by retailers. Either scenario will drive Canadian farmers to foreign
markets and further weaken Canada’s agricultural economy.”

CAAR and the GGC together called on Ottawa to draft a crop input security tax credit program. The government, they said, has already provided cost-shared funding toward tightened security at Canadian ports, showing there’s public precedent for such supports.

“Growers are already telling us that input prices are unbearably high,” said CAAR executive director David MacKay in the association’s release. “So
why should we be expected to pick up the entire security tab knowing that it
will only deter our customers from doing business with us? It amounts to
compulsory economic suicide.”

Moreover, according to GGC executive director Richard Phillips, “grain, pulse and oilseed farmers are very concerned about rapidly rising
input prices and know that incremental costs forced onto our ag retail sector
will eventually be paid for at the farm gate.”

The Farm Bill was vetoed Wednesday by U.S. President George Bush, but his veto was overridden Thursday by both the U.S. Senate and House of Representatives, which can do so with at least a two-thirds majority vote in each chamber.

Chuck Conner, Bush’s deputy secretary of agriculture, said in a release Wednesday that Bush “would not accept a farm bill that fails to reform farm programs at a time when farm income and crop prices are setting records.”

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