Prince Edward Island Agriculture and Forestry Minister Mitch Murphy today debunked a study by the Urban Renaissance Institute that said lavish subsidies to producers are hurting the provincial economy and that the funds should be used to buy them out. The Toronto-based Institute claimed that Prince Edward Island producers received $2.57 in government support for every dollar they earned.
"This study completely lacks credibility and is an insult to producers," said Mr. Murphy. "The authors include all government money spent on food safety, for example, as a subsidy to agriculture. Our food inspection system exists for the public good, and it is absurd to say it is a subsidy to farmers."
Mr. Murphy said that Prince Edward Island producers are highly efficient and competitive and receive among the lowest support levels in Canada. He said that direct payments to Island producers in 1999 and 2000 were 5.6 and 6.6 percent of total farm cash receipts.
The minister said the most credible work done on farm subsidies is by the Organization for Economic Development and Cooperation in Paris.
"The OECD reports that Canadian farmers receive 11 cents on the dollar in support payments while farmers in the European Union and the United States receive 56 cents and 36 cents respectively," he said. "That's a long way from Urban Renaissance's contention of a Canadian average of $3.76."
Mr. Murphy said that Canadian consumers enjoy some of the lowest food costs in the world, as well as one of the safest, because of the efforts of Canadian farmers.
He also disputed the Institute's contention that the potato industry "grab's the lion's share of provincial tax dollars." With a provincial budget of more than $900 million, and even with potato wart, the potato industry received less than $20 million over the past year.
"In an ideal world, there would be no subsidies. Farmers certainly want to earn their incomes from the marketplace," said Mr. Murphy. "However, until such time as the two heavyweights eliminate their subsidies, they will be a fact of life in Canada albeit at significantly lower levels than the US and the EU."