Just Fiddlin...? (Part 2)
Last week's Illative Blog entry (see link) highlighted three issues that we think are critically in need of examination and analysis. This week we examine three additional issues, followed by a discussion of why the capacity to analyse these issues is limited.
4. Canadian
Grain Commission (CGC) - The reform of the CGC represents one of the most
significant regulatory changes in the grain industry over the last 20 years.
While most of the changes have received very little attention by policy
analysts, the changes are nevertheless major. The removal of the Kernel
Visual Distinguishability (KVD) system, the proposal to replace bonding
with a commodity clearinghouse, and the change in the points of inspection will
have dramatic impacts on the structure and performance of the grain handling
and transportation system. These impacts need to be comprehensively thought
through.
5. Safety
Nets - Always a perennial issue, the current discussion is on the livestock
industry and particularly the hog industry. The program to pay producers
to dispose of breeding stock is a major market intrusion - dare we say
comparable to the LIFT program in the early 1970s - and has received little
debate and analysis. As Hartley Furtan indicated in an earlier blog entry (link),
the interesting policy questions are: Should we just let this industry take a
financial hit after encouraging it so strongly? Should this sector be provided
with assistance today to ensure that it is still present when grain prices
again fall?
6. Innovation and R&D - The decline in public support for agricultural R&D - particularly R&D focused on yield increases - has been well documented, making this issue one that has received at least some attention (see Richard Gray's blog entry (link)). Since the benefits of getting this policy issue correct are very large, further attention to this issue is valuable. In particular, the recent rise in food prices worldwide highlights the need to address the declines in R&D activity, and the resulting drop in yield increases, that have been occurring in Canada and around the world.
The list of issues presented above and last week is necessarily selective. It does not include trade issues, such as the WTO negotiations and Country of Origin Labeling legislation in the United States, nor marketing issues such as those associated with the CWB and supply management. Nor does the list include a myriad of agri-business issues - everything from intellectual property rights to food safety regulations. The list also does not include any mention of foreign aid and agricultural development - issues that are now at the top of the international agenda. In short, there a large number of important policy issues, and the returns to additional policy analysis in any one of these areas could be very large.
The existence of such a large number of policy issues requiring attention is troublesome given that the capacity to carry out this work is not being regenerated to the degree it should. As Barry Wilson points out in his March 27, 2008 editorial "Agriculture Misses out on Independent Thought" (link), the capacity for independent policy analysis is shrinking in Canada. This is not a phenomenon unique to Canada - developed countries around the world are not replacing policy experts to the degree necessary to address the series of issues that are now starting to emerge around food and economic development. While there are numerous reasons for why this regeneration is not taking place (agriculture was viewed as a declining industry, we thought we had solved the food problem, farm groups were demanding income support payments), it cannot be because investment in good policy analysis is not valuable. In a future blog entry we examine what the benefit might be to Canada of addressing the six issues that were identified in this and last week's postings.
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