Standstill budget for agriculture

I guess in times of declining government revenues and the inevitable expenditure cutbacks, a government department would probably consider itself fortunate to just standstill.

I guess in times of declining government revenues and the inevitable expenditure cutbacks, a government department would probably consider itself fortunate to just standstill. That’s sort of what happened to the the Alberta department of Agriculture. The department was ordered to make a 7.5% cutback. That’s not a lot for a relatively small department. The budget noted that these reductions were coming from lower payments to income support programs and crop insurance. That’s more or less based on the hope that there will be no market disaster for livestock or crops.

There is leeway in crop insurance by just increasing premiums to growers. With livestock it may be more difficult. Present support programs which are federal/provincial hybrids just don’t deal adequately with ongoing market downturns, therefore even if a disaster occurs next year Alberta Ag could stick to its guns and there would be no ad hoc emergency payments. They could just blame that on the feds. However, Alberta usually comes through when producers are in dire straits.

Besides all indications are that as cattle and hog numbers continue to decrease in North America, beef and pork prices will increase and producers will see much better prices over the next year. The only unknown would be weather which could see reduced pasture and hay yields. Producers could mitigate that by purchasing forage and pasture insurance, something many might well consider after last year’s drought which affected a good chunk of the province.

One government ag agency that was spared the budget cutback was the newly hatched Alberta Meat and Livestock Agency (ALMA), a legacy of the former Minister. It would seem that this agency was either spared because the new Minister is just fresh on the job, or it is being pushed forward by the government into the faces of its many critics. ALMA is in the sights of the Wildrose Alliance party as it has been suggested for termination as a cost saving measure.

That action by the opposition will probably save ALMA, as governments not only do not admit to making mistakes but will never take any suggestion from the opposition even if it makes sense – heaven forbid the Minister’s ego would be at stake.

ALMA also serves a useful purpose for hiding civil servants during cutbacks. Its an old trick – when government departments are ordered to reduce staff as a cost saving measures – they transfer employees to government agencies whose staff and budgets are accounted for differently under budget and expenditure rules. For instance ALMA has taken about 30 staff from Alberta Ag – the department can then claim it has reduced its staff by 30 proving it is cutting back. The 30 people transferred of course remain civil servants but are accounted for by means of a blanket grant to the agency from government. Its all smoke and mirrors and most government departments play the game.

Its all a far cry when former Premier Klein made his famous cutbacks back in the nineties. Back then all departments and agencies had to cutback not just expenditures but cutback employees equally from top to bottom. That was a brilliant move because it prevented senior bureaucrats from laying off all the secretaries and receptionists and not the entrenched senior staff. That saw Alta Ag back then eliminate two of the five assistant deputy Ministers, along with most of their departments. No one noticed they were gone was the irony.

Of course in the scheme of overall government expenditures agriculture is small potatoes compared to the big dog spenders at health, education and welfare. Those three government departments pretty well eat up 80% of the government budget.

However, Alberta Agriculture could save a lot of money if the Minister made a policy of matching grants to the income of commodity groups. For instance if the pork producers raised 5 million through checkoffs the Minister would just write them a cheque for an additional 5 million. All of it to be used for industry development. At present the government does that in an indirect way through a convoluted bureaucratic process of agencies and grant programs. By just making direct payments busfulls of busybody bureaucrats could be laid off saving millions. But that is perhaps too much common sense.