Interview with Peter Dowling
of Canada's National Farmers Union
Part 1 - The Farm Income Crisis
The farm income crisis, supply management,
sustainability and more
Howe Island, Ontario, Canada
Peter Dowling is the Ontario Coordinator for the National Farmers Union (NFU). The interview was conducted by Nic Paget-Clarke on the Dowling farm on Howe Island in the Thousand Islands area of eastern Ontario, Canada, August 16, 2000.
In Motion Magazine: What is the National Farmers Union?
Peter Dowling: The NFU is a national direct-membership voluntary farm organization. It represents thousands of small and medium-sized farms across Canada.
In Motion Magazine: Who can join?
Peter Dowling: We have farm membership and non-farm associate membership.
In Motion Magazine: Where is it based?
Peter Dowling: Our national office is in Saskatoon, Saskatchewan.
In Motion Magazine: So what does the NFU do?
Peter Dowling: We advocate for small and medium-sized farms. We get involved in agriculture and food policy at various levels. We work on issues that are most relevant to our members. In general, we have been analysing the root causes of the farm income crisis and developing solutions. In western Canada. our members spend a lot of time on grain transportation and marketing issues and in eastern Canada, members are involved in potato, dairy and mega-barn concerns. Also, we help our members become more self-sufficient in their farming practices so that they are not as dependent on outside forces that we have no control over.
In Motion Magazine: Is the farm income crisis a major issue facing Canadian farmers?
Peter Dowling: Yes it is and it overshadows other issues. If we had enough money to pay bills then some of the other things would be less of a concern. If there is enough money coming from your product then you don't worry as much about what it costs to ship your product.
There is also a lot of concern about biotechnology.
In Motion Magazine: What does it mean the farm income crisis?
Peter Dowling: It means farmers aren't getting enough income to pay their bills. You can only carry on for so long without having to give up if the money isn't there. A lot of farmers are going out and finding outside jobs. They are putting the money that they make on those jobs back into their farms. It's a way of keeping things going but it's not very acceptable and most farmers would rather be farming full-time.
In Motion Magazine: Why aren't they making enough income, especially given that the economy as a whole is doing so well?
Peter Dowling: Things are quite good in many sectors but commodity prices have been in the dumpster. Some would argue that foreign subsidies are the root of our problems but the NFU has done some work on what the real causes are and we don't believe that subsidies are the main source of our problems. We studied the market power of transnational corporations and we concluded that the imbalance there has a huge effect on farm incomes.
In Motion Magazine: Why don't you think it's the subsidies?
Peter Dowling: In our study, we found that subsidies don't necessarily encourage production. Australia and Argentina which don't have the high subsidies of the European Union, are experiencing increases in production just like the E.U. The argument that subsidies have an undue influence on production doesn't hold when you examine the levels of production in these low-subsidy countries.
In Motion Magazine: Why do you think so many Canadian politicians are saying that foreign subsidies are the problem?
In Motion Magazine: What's the context of them saying it?
Peter Dowling: They don't want to continue to pay subsidies to farmers in Canada at the levels that are being paid in countries such as the United States and the European Union. The governments objective is to pay out less of the tax dollar to farmers by talking other countries into less subsidizing.
In Motion Magazine: So there are Canadian subsidies?
Peter Dowling: Yes, there are. It took quite a bit of effort on the part of farmers but there are some. We call them safety net programs in Canada. In bad years there is money available to help farmers.
In Motion Magazine: Where do these subsidies come from?
Peter Dowling: They come from federal and provincial agreements. Farmers have pressured both federal and provincial governments to put together programs that will help in cases where farmers are experiencing low incomes for reasons that they cannot control - like foreign subsidies, the weather, things that effect farming. Commodity pricing is a thing that we cannot control.
In Motion Magazine: Are these programs like insurance?
Peter Dowling: It is a kind of insurance. The safety net that has been most recently negotiated is based on what your historic income is and how much you have earned over the last few years compared to what you earned this year. There is some topping up to your historic levels if you are having problems with your farm income.
In Motion Magazine: If it's not subsidies, then what is causing the farm income crisis.
Peter Dowling: If you look at an hour glass you can see the sand in the top. You can consider that to be our food supply. Farmers supply the food and they are in that top section of an hourglass. Then there's the restricted area in the center where the sand drops through and you can consider that to be the corporate influence on the system. The bottom section is where the food ends up -- the consumer level.
There are large numbers of consumers and there's relatively large numbers of farmers but there's a small number of players in the restricted area controlling how the food goes to the consumer. We feel that restricted area is part of our problem. The corporations are getting record profits, consumers prices are as high as always and net farm incomes are the lowest theyve been since the '30s.
The hog situation is an example. Starting in October '98, farmers were getting maybe 50 percent of their normal price for hogs. Consumers were paying the same amount for their pork chops. And the people that process the hogs were reporting record profits. It's a case of the processors having control over the food, control over how much the consumers pay, and control over how much the processors pay farmers.
In Motion Magazine: How do they not pay a fair price to the farmer. How do they implement that?
Peter Dowling: They stop buying.
In one instance, processors were claiming that they did not have processing capacity. They could only take so many hogs. When nobody's buying the hogs then the price goes down. You start to sell the hogs to get rid of them to cut your costs. As long as you've got a hog and you're feeding it and it's not worth anything, you are losing more and more money all the time. At some point you have to sell the hogs.
In Motion Magazine: So the processors simply say this is what we're going to pay you?
Peter Dowling: Yes.
In Motion Magazine: And that's how it's done with the cattle and seed?
Peter Dowling: With grain there's a few huge buyers and exporters that can make money no matter what the price is because their profits are based on the margin. It doesn't have anything to do with what they pay for the grain it's just a matter of how much they add on top of what they pay. They are the grain companies, the grain merchants.
In Motion Magazine: Are they squeezing the producers of the grain?
Peter Dowling: Yes. There are enough producers that buyers can choose the ones they will deal with. Pit one against another. There are not enough buyers for the producers to sell to.
That's where the Canadian Wheat Board, for example, gives farmers the advantage as a group. Everyone has to sell their grain through this one single desk, so if the buyers want wheat or malting barley, then they have to go to the Canadian Wheat Board to buy it. The producer has some market power in that case.
The same with supply management, the producer sells the milk, eggs or poultry through the one agency and all the processors have to go through that agency if they want the products. It's far more transparent, when everybody knows you can establish the price openly.
In Motion Magazine: So it's a good thing -- supply management?
Peter Dowling: Yes.
In Motion Magazine: How are they able to squeeze farmers if that's a good thing that exists?
But in the grains and oilseeds situation, it's an international market that we are marketing into and there are influences that not even the Canadian Wheat Board can control. Buyers can go to the Canadian Wheat Board or they can go to grain companies in the United States, or the Australian Wheat Board, who will supply them with what they need.
Of course, the Canadian Wheat Board does have an advantage in being able to meet quality standards other countries don't meet because of the way that they handle the grain. The CWB segregates grains to meet buyers quality specifications.
|Published in In Motion Magazine - November 12, 2000
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