Quick Facts
- Canadian farmers and ranchers are at a significant competitive disadvantage, given the level financial support currently available to their counterparts in the US and EU.
- Taking all subsidies into account, total public support of agricultural income reached 38% of agricultural income on average in the EU.
- In the US, government support accounted for almost 40% of farm income in 2020.
- The risk profile of many sectors in agriculture has increased dramatically over the past five years due to climate change, trade wars and supply chain disruptions.
- AgriStability, the primary risk management program for producers facing severe income losses, is seen as overly complicated and providing an inadequate level of support for producers in need.
Issue Overview
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 geopolitical risk and government support 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 trade environment. 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, facilitating investment in response to future opportunities and acquiring technological innovations. Several government programs help them to meet these needs:
Recent Developments
Starting with the 2023 program year, the compensation rate under AgriStability will increase from 70% to 80%. As a result, producers may receive a payment if their production margin in the current year falls below their historical reference margin by more than 30%.
In 2025, the Federal government committed to permanently doubling the revenue protection for farmers under the AgriStability program, from $3 million to $6 million per farm in case of significant revenue drops from the impacts of tariffs, extreme weather events and other external factors.
Working Towards Solutions
- During 2020 CFA launched the largest National Campaign in the organization’s history, Food for Thought, with one of the key messages being to improve the AgriStability program. This campaign led to the federal proposal to increase the compensation rate of AgriStability mentioned above.
- CFA was supportive of the change to AgriStability called on the federal government to offer the enhanced compensation rate to those provinces willing to contribute their 40% share.
- CFA has been heavily involved in the BRM review process which has been ongoing for many years.
- As the next five-year FPT Framework for Agriculture is being developed, CFA is urging that BRM programs be improved to reflect the increased cost and risk in Canadian agriculture.