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Like their U.S. counterparts, Canadian farmers in many parts of the country are watching their meager crops wither - if they germinated at all - under the onslaught of a cruel sun.

The drought that began when winter snow failed to fall has gripped Canada's grain-growing and cattle-raising prairie provinces, cutting not only into grain production but into the beef industry as well. In eastern Canada, drought is crippling corn production and reducing vegetable yields.Canada is traditionally the second-largest grain exporter in the world, right behind the United States, and depends on grain sales for nearly $7.2 billion a year in foreign exchange. This year's exports could be cut to a third of normal. One province, Saskatchewan, has had its grain crop described as a "dead loss" by its premier, Grant Devine, himself an agricultural economist.

A spokesman for the Canadian Wheat Board said: "We think we know what (production) is lost so far. But we don't know when it will bottom out."

Unless the remaining growing areas get an inch of rain a week for the next three weeks - a dubious prospect - Canadian exporters will not be able to satisfy their overseas customers. Already, former agreements with some foreign buyers (Brazil and Egypt, for example) have not been renewed because of the drought.

While the size of crop failure can be roughly estimated, the human cost is still statistically elusive, but a record number of farmers, still burdened with large mortgages at high interest rates, are said to be quitting the soil.

Cattle farmers in the Canadian West were the first to receive emergency aid from the federal government - $180 million to buy feed grain for herds that have nothing to eat on the parched prairie.

The government quickly recognized the Catch-22 situation in which cattlemen found themselves: If they sell their cattle, as many already have, they'll have to re-stock next year at much higher prices to get back into business. But the price of feed needed to maintain herds has skyrocketed because of the demand caused by the drought, so the government stepped in with its subsidy.

Canada is usually self-sufficient in food throughout the growing season, relying on imports only through the harsh Canadian winter. But the drought has hit the fruit- and vegetable-growing regions of eastern Canada, too, with the food-belt provinces of Ontario and Quebec suffering as much as the West. In Ontario, corn that should be over a farmer's shoulder has grown only to knee-height.

The ripple effect of the drought is starting to be felt in other areas of the economy. For example, Canadian grain for exports is usually loaded aboard ships in Canada's West and East Coast ports, as well as inland ports along the Great Lakes.

This year, there may be only enough grain to keep Vancouver busy, meaning massive layoffs in the grain-handling facilities of central and eastern Canada, with the inevitable impact of regional depression in local communities.

And tens of thousands of railway workers and sailors on Canada's 100-ship inland fleet will likely be out of work before the short Canadian summer ends.

In the longer term, the drought could be inflationary, reducing the value of the Canadian dollar as grain and beef exports fall and the cost of imports - including food - rises. The central bank has already signalled that interest rates will rise to choke off inflation, squeezing farmers all over again, just as they try to recover from the lost crop year.

Ironically, the 1988 drought has brought record prices - with increases of 75 percent for some grains - but the farmers don't have the grain to sell to a suddenly insatiable market.

"It could be $120 a bushel," said one corn farmer, "but if you don't have any bushels, it doesn't do you any good."