Grain producers strapped for cash, need financial help
By LINDSAY SCHMIDT of the Weyburn Review
When asked whether the federal government should step in to aid Western Canadian producers, Weyburn-area farmers struggle to find the correct answer.
"I definitely need some cash injection in my farm because it's in pretty rough shape but I hate government handouts," said Weyburn producer Gene Minard. "So I am in favour of some help but there's not enough money in education and health as it is and it would be a shame to be more of a burden on the system and the taxpayers. I'm not really sure how that help should come."
As European and American governments continue to subsidize grain producers in their countries, Canadian Wheat Board grain prices remain low. The CWB initial price for No. 1 Red Spring Wheat has gone to $2.18 per bushel effective Aug. 10, 1998, from $3.32 per bushel effective July 21. At the same time, the initial price for No. 1 Amber Durum is down to $2.57 per bushel effective Aug. 10, 1998, from $5.95 per bushel as of July 21, 1998, before the new crop year.
"The Europeans and the Americans are subsidized so heavily right now. It's really tough to compete," said Russ Benneweis. Benneweis began farming with his parents full time just two years ago on the family farm south of Oungre.
Benneweis said that although the low prices leave him and his family frustrated and short of cash, they will not be withdrawing from the Net Income Stabilization Account (NISA). Since he's only been farming full time for a short period of time, Benneweis has not been able to contribute much to the program.
"Every year you have to improve your operation a bit. You have to improve machinery, production and if you're not able to go ahead you're going backwards. And we're not going forward right now," he said.
The Benneweis crop rotation consists of flax, canola, wheat, durum and oats. "Some years our oats are the best net-producing crop. We're fortunate enough to also have cattle and so far those prices are staying up. That definitely helps."
As Benneweis sees and hears of farm organizations lobbying the federal government for aid to prairie producers, he recognizes that grain producers are not the only group suffering in the nation.
"I'm philosophically opposed to government payouts. I mean, sure, I'd like to get a payment but I know that's not the answer. And if there is a payment it has to be fair and equal across the board. The hog industry is also suffering right now so you can't give one money and not the other. It's a tough call," he said.
Right now the family is still planning on moving forward with a full crop come seeding time with the expectation of having to reduce inputs. But right now crop planning will depend more on moisture conditions than the financial state of their business.
Harv McEwen is also preparing for a full crop since precipitation levels were higher than normal this fall. A full crop may not have been possible if McEwen hadn't cut back last year.
"Last year at this time the ground was so dry that for the first time in 20, 25 years I summerfallowed quite a bit and I cut back on fertilizer. I tried to keep my expenses down for this year and now I'm expecting to seed everything again," he said.
McEwen, a Francis-area farmer for almost 25 years, believes the NISA program is a good one but it hasn't been in effect long enough for some farmers to benefit much. While he's been able to contribute for the eight years the program has been running, he knows producers who have not banked much. The average NISA account only contains $16,614 for prairie producers. Per-farm realized net income, which has consistently ranged between $10,000 and $30,000 per Saskatchewan farm from the 1940s to the 1980s, is projected to be only $3,408 in 1998 and $3,047 in 1999.
"I see some neighbours doing OK and others that are struggling. It's really tough if you're just starting out or if you've got two or three kids in university. You've got to feel sorry for them," McEwen said.
The dilemma facing prairie producers is not an easy one for McEwen to solve.
"That's a tough one. Who do you take the money away from? I heard the other day that there is a large number of homeless in Toronto. They don't have a place to stay. We all have a place to stay and we have something to eat right now. So who do you help? And what programs do you cut?"
Phil Babiarz is one farmer who is ready for the government to step in with some aid.
The Weyburn grain producer has been farming for 15 years, making durum and oats his main crop. With durum prices drastically reduced and a couple years of poor oat crops, Babiarz's wife returned to work last year in order to keep the family of five afloat.
"The cash flow just isn't there anymore. I'm cutting back on seeding everything and I'm going to summerfallow more. We're cutting expenses and cutting inputs," he said.
Babiarz has been contributing to NISA since the program began and is now looking to withdraw in order to put in this year's crop. But the money he has stashed away into the account won't get him much farther than that.
"It's not fair to expect people to pay for us but something has to be done. Every other federal government is helping their farmers. I expect something from our government, some kind of response if they are a responsible government.
"Yeah, put that in the paper. Let them know that I expect some kind of help."
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