CFA calls on Federal-Provincial Ministers to adopt immediate short-term changes as part of the BRM Strategic Review

The CFA called on Federal, Provincial and Territorial Ministers of Agriculture to make immediate adjustments to the AgriStability program to help tide the industry over until the next generation of agricultural programming can be developed and implemented.

“The AgriStability program provides support to struggling livestock farmers, as well as producers in other commodities such as horticulture, who have faced significant hardship,” said CFA President Laurent Pellerin. “Livestock producers, especially pork and cattle farmers, have seen their reference margins decimated over the past few years. Many are reaching the point where they will have difficulty even passing the viability test to receive support. Farmers were expecting to see concrete results and got more consultation.”

The CFA was encouraged however to see included in the communiqué the Federal, Provincial and Territorial Ministers of Agriculture meeting, held in Toronto on February 5, that Governments remain “…determined to ensure that programs continue to respond to the sector’s needs…to help producers secure a stable and prosperous future”. The CFA and its members have definite ideas on what these short term solutions should be and have met recently with ministers and department officials to discuss these ideas.

“The adjustments put forward are intended to be short-term temporary improvements that will allow the current suite of BRM programs to provide some additional and essential aid to struggling producers,” added Pellerin. “In the long-term, the CFA and its members remain committed to work with governments in developing a BRM suite that supports a national food strategy and would help to eliminate the need for these types of temporary solutions in the future.”

Backgrounder

CFA Proposed Changes to AgriStability Program – January 2010

The CFA and its members look forward to be involved in the BRM Strategic review as early as possible to ensure that industry views are captured and that a true partnership between government and farmers can be implemented. It is understood that any review would feed into the next generation agricultural policy framework in Canada.

However, the next generation agricultural policy framework is not set to be implemented for a few more years. In the meantime, farmers across Canada, especially in the livestock sector, are under intense financial pressure. The CFA proposes that government address current issues in the agricultural sector by implementing a few short-term temporary measures that will help tie the industry over until the next generation of agricultural programming can be developed and implemented.

Proposed Short-term changes to AgriStability

The AgriStability program provides support to struggling livestock farmers, as well as producers in other commodities such as horticulture, who have faced significant hardship. Livestock producers, especially pork and cattle farmers, have seen their reference margins decimated over the past few years, and many are reaching the point where they will have difficulty even passing the viability test to receive support. Those in the horticulture sector have faced significant challenges with respect to labour and other input costs as well as exchange rate volatility.

Given that the majority of demand for this program tends to come from the grains and oilseeds sector, and that high prices of the past two to three years has temporarily reduced budgetary costs for this program, there remains fiscal room to create short-term AgriStability adjustments that will help aid these struggling producers until the BRM review is complete and permanent changes to the BRM suite can be implemented. 

While AgriStability could be improved in numerous ways, CFA members have indicated that a few initial adjustments could begin reducing the financial challenges facing many producers. These changes could include:

Adjusting how AgriStability treats Negative Margins

• Removing the negative margin viability test to help producers in long-term declines

• Increase negative margin coverage from 60% to 70%

Providing additional AgriStability options for producers with reference margin issues

• A one-time choice of top 15% of CAIS or AgriInvest, retroactive to the introduction of AgriInvest

• An annual choice between the better of the Olympic or previous 3 year average for reference margin

• Relaxing program caps that restrict some operations from fully utilizing AgriStability

In addition, the CFA and its members continue to underline the need to allow individual provinces and commodities to design specific programming to address the current crisis.  By permitting business risk management (BRM) projects to be funded through the AgriFlexibility program, as well as augmenting current program funding with excess monies from reduced 2008/2009 demand for AgriStability payments, provinces and commodities could tailor-design customized programs that target funds to sectors and producers who are most in need.