Friday, August 1, 2008

Tobacco bailout insufficient

This is not the news that tobacco farmers had been hoping for. Today, Diane Finley, the Immigration minister who also represents the district where the vast majority of Canada's tobacco is grown, as well as federal Agriculture minister Gerry Ritz, offered a buyout package of $300 million to the remaining farmers left in the business, about 1500 or so. The farmers were asking for $1 billion.

While I despise tobacco, I think the farmers had a case and the bailout should have been much closer to their demands. Here's why.

A few years back, in an attempt to cut down on house fires caused by smoking in bed (hard to believe that some are still stupid enough to do that), the farmers were forced to update their flues to cure their product in a way that reduced the risk. It had the desired effect but it happened at a time when demand for Canadian product was going down anyway and being supplanted by imported products, much of it smuggled illegally. In effect, the farmers were forced to assume all the risk with nothing to show for it.

Further, one notes that as tobacco taxes have gone back up to pre-1990s levels, smuggling has exploded. The smugglers are not in my opinion of the type of people who belong to the traditional societies that preached about sharing and sharing alike. They are, point in fact, people who have sought to create a multi-tiered society where none like it exist before. If reservations are prospering from the trade of contraband tobacco, I'd like to see the results.

Just drive down to Six Nations, a short spin from where I live. There are a few fair sized manors around the reserve. But most residents still live in depressed housing, some even in trailers. This disparity cannot be disputed. When some people are clearing as much as $100k a month or more and others barely live on the entitlements they receive from the feds there is something wrong with a situation that allows this to happen even with tax-exempt status.

There are some licensed facilities on reserves that pay the proper duties and taxes for cigarettes shipped and sold off-reserve. These taxes are supposed to fund our social programs, including the programs natives themselves use, as well as agricultural stabilization measures to help farmers during the lean times. But there are also unlicensed facilities too -- there and across the country. And guess what? We're not allowed to know facilities which are legal and which are not. IT'S A STATE SECRET, under the Excise Act!!! How are we supposed to crack down on the problem if even the police aren't allowed to know what's what?

So how does this issue affect the farmers? This: They weren't allowed to sell tobacco to their own neighbours, the people at Six Nations. Instead, via a complicated network the stuff was processed here, shipped duty free to the states and smuggled back into Canada. Imagine all the greenhouse gases wasted in that as opposed to growing and processing locally (supposedly in the name of native sovereignty)! Would it have solved all the farmers' problems? Not necessarily, but the reservation would have had a reliable purchaser of their product and the crisis would not have been nearly as huge as it has become.

And who's to blame for this SNAFU? Both the federal and provincial governments who share jurisdiction on agriculture: The feds for not acting to ensure what was legal remained legal and the province for not granting Six Nations the license they wanted to purchase the local tobacco.

In point of fact, it is a fair estimate that had all the smuggling been stopped and farmers gotten the subsidies they were entitled to, it would add up to about a billion bucks. So to be offered only $300 million is really a slap in the face, just a day after two of the largest tobacco companies in Canada paid about a billion and a half in fines for their role in the smuggling during the early 1990s and one presumes the companies' immunity from future prosecution.

Norfolk, Haldimand Counties and Oxford Counties possess immense potential for diversification both in terms of different kinds of crops as well as attracting new kinds of businesses. For the Conservatives to turn their back on the very kind of voters they claim is their base is an insult, plain and simple. It insults both non-natives and natives. The farmers have every right to demand more for the negligence caused to them in times past, no matter what they grew.

Finley may have well signed her warrant for defeat in the next election.

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