2008

The passage of the U.S. government's US$290 billion farm bill guarantees not only more subsidies for wealthy U.S. farmers,

but tax breaks and grants for U.S. ag input retailers that their Canadian competitors can't match, two Canadian groups said

Friday. The Canadian Association of Agri-Retailers (CAAR) and the Grain Growers of Canada (GGC) warn that the U.S. bill will

hand their U.S. counterparts a new competitive advantage. The bill, which includes USDA's food programs for schools and the

poor as well as land stewardship programming and other initiatives, also gives U.S. ag retailers "substantial tax credits and

grants for security of essential crop nutrient and protection products," CAAR said. Both the U.S. and Canada have sought to

tighten security of certain chemicals such as ammonium nitrate fertilizer, citing the use of common chemicals in terrorist

attacks overseas and in home-grown attacks such as the 1995 Oklahoma City bombing, which relied on ammonium nitrate. Another

fertilizer, anhydrous ammonia, is often an ingredient used by illegal drug dealers in the "cooking" of crystal meth, and has

been known to be stolen from tanks either on farms or retail sites. New measures, including a ban on the resale of ammonium

nitrate and registration, record-keeping and storage requirements for its retail dealers, take effect in Canada on June 1.

Operational costs "Recent security codes and regulations are strapping agri-retailers at a particularly bad time when

operational costs are already at an all-time high," the association said. "Incurring further expense will either result in

higher input prices to farmers or limited product availability due to entire product lines being dropped by retailers. Either

scenario will drive Canadian farmers to foreign markets and further weaken Canada's agricultural economy." CAAR and the GGC

together called on Ottawa to draft a crop input security tax credit program. The government, they said, has already provided

cost-shared funding toward tightened security at Canadian ports, showing there's public precedent for such supports. "Growers

are already telling us that input prices are unbearably high," said CAAR executive director David MacKay in the association's

release. "So why should we be expected to pick up the entire security tab knowing that it will only deter our customers from

doing business with us? It amounts to compulsory economic suicide." Moreover, according to GGC executive director Richard

Phillips, "grain, pulse and oilseed farmers are very concerned about rapidly rising input prices and know that incremental

costs forced onto our ag retail sector will eventually be paid for at the farm gate." The Farm Bill was vetoed Wednesday by

U.S. President George Bush, but his veto was overridden Thursday by both the U.S. Senate and House of Representatives, which

can do so with at least a two-thirds majority vote in each chamber. Chuck Conner, Bush's deputy secretary of agriculture,

said in a release Wednesday that Bush "would not accept a farm bill that fails to reform farm programs at a time when farm

income and crop prices are setting records."