(OTTAWA) - While yesterday’s budget makes a sizable investment in agriculture, the government’s planned flowing mechanism means those sectors most in need may not see a penny and certainly not for months.

The federal budget announced $1.5 billion for 2006 -- $500 million for farm support plus a one-time investment of $1billion to assist farmers in the transition to more effective programming for farm income stabilization and disaster relief. The $500 million will go to making much-need changes to the Canadian Agricultural Income Stabilization (CAIS) program. Farmers will benefit from those changes in the long-term but the $500 million is program money and farmers will not receive any of it directly.

The $1 billion is slated to flow through the CAIS program to retroactive inventory valuation or adjustments. The concern is this method will only address sharp yearly decline in prices and will not assist those sectors identified in most need – grains and oilseeds, and horticulture.

“Farmers made it very clear – they needed immediate help. People are having their lines of credit cut off right now,” said Bob Friesen, President of the Canadian Federation of Agriculture. “This method will take months to administer, offers no guarantee that it will be targeted to need and provides nothing bankable that farmers can take to financial institutions.”

The grains and oilseeds sector has faced slower long-term declines in prices and as a result may not be addressed effectively by this method. Likewise, the horticulture sector, which does not carry inventory over from one crop year to another, will also not benefit from using inventory valuations. The flowing mechanism also discriminates geographically – Quebec farmers will not see any money flow to them under this retroactive inventory valuation due to differences in accounting systems.