Ottawa pledges aid to farmers in upcoming budget

Fri Jan 23, 2009 3:43pm EST
 
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OTTAWA (Reuters) - Canada's upcoming budget plan will include aid for farmers and farm communities hard-hit by the economic downturn, Agriculture Minister Gerry Ritz said on Friday.

Ritz said the budget, to be presented by Finance Minister Jim Flaherty on Tuesday afternoon, will propose a C$1 billion ($800 million) "community adjustment fund" targeted at communities battered because they rely on industries like farming, forestry and manufacturing.

A similar fund announced last year was aimed primarily at forestry and manufacturing. The new money will go also to farm areas.

"This will go to the rural communities that are facing some economic situations," Ritz told reporters by teleconference.

Ritz said Flaherty's spending plan would include an additional C$500 million on programs to help farmers lower production costs.

"This is a stand-alone pool of money that will drive innovation, it will drive environmental change, it will drive marketing opportunities. We're looking at new and better ways to control costs of inputs on the farm," Ritz said.

He also said Ottawa would commit C$50 million to expand slaughterhouse capacity for beef, pork and other livestock producers.

He said Canada had let some of its capacity shift to the United States but wanted to now ramp it up again.

Flaherty's budget, to be presented to Parliament on Tuesday at 4 p.m. EST, will lay out the details of a broad stimulus package centered on infrastructure and tax cuts.

A government official said on Thursday the plan will lead to a budget deficit of C$34 billion in the coming fiscal year, Canada's first deficit since 1996-97.

(Reporting by Louise Egan; editing by Rob Wilson)