Are agriculture cutbacks in the offing for new year?

Whenever energy prices take a dive in Alberta, cutbacks to government spending are sure to follow.

Whenever energy prices take a dive in Alberta, cutbacks to government spending are sure to follow. This old warhorse remembers a few cycles of boom and bust in government spending going back to the Lougheed days. Back then, the government was flush with cash from high oil ($35 a barrel was high back then) and gas prices went on a diversification spending spree that included the agriculture department. Tax money was pumped into every idea, with the hope it would bring industry to the province.

Old-school ag bureaucrats saw that as a blank cheque to increase extension services, a traditional service that was dear to their hearts. New district agriculturist offices were opened in every small town in Alberta, along with district home economists — something unique to Alberta. A new ag department head office was also built in Edmonton to house all the new administrators needed to manage the rapidly expanding empire — I believe there were at least five assistant deputy ministers at the time. Then when energy prices collapsed and the Klein cutback era arrived, it all quickly shrunk. Those glory days lasted about 10 years.

Since that time, the ag department has had various reincarnations, but it’s a ghost of its former self. That’s probably a good thing, being the ag economy has changed with consolidation and specialization. One of the advantages the ag department has over other ministries is that because it is so small, structural changes can be made without a lot of bureaucratic inertia and political consequences. On the other hand, that also causes instability and policies that can change on a whim. Department officials probably shudder whenever a new minister arrives, knowing that they will probably want to launch some new restructuring scheme just so they can make their mark on the department.

One of the realities that affects the extent of department cutbacks has to do with the role of a ministry within the context of its contribution to the economy. That would also include a significant regulatory role. That’s where agriculture pales in comparison to such big-dog departments as education, health and welfare. It even loses out to the environment and energy departments, because those folks deal with more sexy issues like monitoring and emissions. Even though agriculture and food processing are the second largest sector of the economy, the department’s size relative to that sector is small indeed. What causes to upset that situation is when some climate or disease calamity requires an infusion of taxpayer cash. It seems whenever that happens, it takes at least a billion dollars to resolve. That’s when the ag minister of the day has to go cap in hand to the cabinet to beg for help. That hasn’t been easy for many years due to a revolving door of agriculture ministers — I believe there have been seven ag ministers in the past nine years — but I have lost track.

With all due respect to those ministers, such a temporary nature to the job doesn’t give them much clout around the cabinet table. In reality, it probably puts them at a disadvantage whenever a new cutback campaign is launched. Without a lot of experience and backup in cabinet, all a neophyte ag minister can say at those times is, “Yes Ma’am.”

Which brings us to the present situation. I expect the best the ag minister can hope for is a minor reduction in the department’s budget — not that it matters. The ag budget is quite modest compared to the big spenders, reductions of a few million is all that is realistically possible — which is pretty insignificant in the big deficit picture. However, no doubt department bean-counters are trying to find anything that can be reduced or eliminated. I expect such agencies as ALMA and many of the research bodies will see reductions in their budgets. That would be shortsighted, as those folks can actually generate more economic returns than most other government bodies.

There is probably another group of ag bureaucrats whose main job is to collectively pray that no weather, market or disease calamity will occur over the next year that would require them to come up with the rescue funds to deal with those situations. I am biased, but perhaps the ag department needs to be exempted from any cutbacks, considering their activities tend to contribute to a net benefit to the economy.

Compare them to such spend-thrift departments as Alberta Health Services, where millions are spent on travel, perks and over-the-top salaries. I rest my case.