Net income for Canada 's grains and oilseed producers continues to be depressed below the natural prices that would be obtained in an undistorted world market. At the heart of these artificially low prices is the growing gap between safety net support in Canada and subsidies handed out by our trading partners.
For example, according to the latest estimates (for 2002) from the Organization for Economic Co-operation and Development (OECD), European wheat farmers received 46% of their income from government and US wheat farmers received 30% of their income from government. At the same time Canadian wheat farmers only received 18% income support from the federal government.
Using Agriculture and Agri-Food Canada 's statistics, we have estimated that farmers absorb approximately $1.3 billion in trade injury each year. This calculation is only for the six major grains and oilseeds (durum, wheat, barley, canola, corn, and soybeans).
The negative impact of artificial world prices continues to grow as the domestic support paid out by our trading partners continues to rise.
Depressed world prices, caused by rising foreign subsidization, are having a secondary impact on Canadian grain and oilseed farmers. Canada 's principal safety net programs are based on historical revenues. Because our grains and oilseed producers receive world prices, these revenues have been falling as a direct result of rising foreign subsidies. This means that Canadian safety net spending will decline at a time when it is needed the most - when the negative impact of foreign subsidies on world markets is increasing.
This situation is unique to the grains and oilseed industry in Canada . No other sector of Canadian agriculture faces the same subsidy gap and few producers are as dependent upon world markets. Therefore no other sector is harmed to the same degree by foreign interference in the market.
