Farmers need flexible programs to help manage risks beyond their control
While agriculture is one of Canada’s main economic pillars, it is also a high-risk business. Farmers must regularly balance decisions based on volatile prices, unpredictable weather, and a global market influenced by government supports to competing producers in other countries. Many of these risks represent challenges beyond the farmer’s control.
To reach its full potential, the Canadian agriculture sector needs a stable economic foundation that can withstand the pressures of a shifting global and domestic market climate. To manage risks that can’t be addressed through on-farm practices, Canadian producers participate in business risk management (BRM) programs that support them in adapting to evolving markets, stabilizing income over the long-term, and acquiring technological innovations. Several government programs help them to meet these needs:
CFA supports review of BRM programs
CFA members were disappointed with the limited dialogue between the agriculture industry and government prior to BRM program changes announced under the new Canadian Agricultural Partnership (CAP), specifically AgriInvest, where annual matching government contribution limits based on allowable net sales were reduced.
Through collaboration with the AgGrowth Coalition, CFA called for a BRM review to create an opportunity to build new partnerships between government and industry to optimize BRM programs and support Canadian farmers in the future. The government has agreed to this review, and early findings from the review were brought forward for consideration at the July 2018 federal/provincial/territorial (FPT) agriculture ministers’ meeting.
The AgGrowth Coalition has created an industry BRM committee to conduct research, develop policy positions and present reform options from a farmer perspective, ensuring the industry has the capacity and resources for ongoing engagement at all levels of the BRM review.
CFA and the AgGrowth Coalition will continue to work with FPT government officials to ensure a meaningful, comprehensive review of BRM programs takes place, engaging producer groups in ongoing dialogue. To this end, the AgGrowth Coalition has nominated several of its members to take part in the External Advisory Panel, which is a panel consisting of producers, academics and global experts who will provide input throughout the review.
CFA continues its activity in all aspects of the review to ensure that the farmers’ needs are met and that flexible, affordable and useful BRM programs are available in the future.
Recommendations:
- Any unused program dollars in one year must be rolled over for use in future years.
- Programs should be designed in such a way that farmers can make maximum use of them.
- Once a program is established, it must be regularly reviewed to reflect current needs of the industry.
- Design features of any income stabilization program should remain nationally uniform but with the flexibility to allow provinces/producers to enhance and provide other companion programs.
- Under no circumstances should there be prorating of program payments.