No clear solution on AgriStability

Federal government makes new proposal to provinces

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Glacier FarmMedia – No consensus on changes to business risk management was reached during the latest round of federal-provincial-territorial meetings.

After the meetings ended Nov. 27, federal Minister of Agriculture and Agri-Food Marie-Claude Bibeau explained Ottawa was willing to maintain the current cost sharing of the programs at a 60-40 split between her government and the provinces.

Why it matters: Business risk management programs form the front-line of safety nets to help farmers through difficult times.

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Bibeau’s proposal also includes an increase in the compensation rate offered under the AgriStability program to 80 per cent from 70, and a removal of the reference margin limit.

According to Bibeau, a removal of reference margins will increase funding to farmers by more than 30 per cent. An increase in the compensation rate would bring funding to farmers up by more than 50 per cent, she said.

However, the proposal won’t change the trigger levels, which was one of the major requests of farm organizations.

“While I believe the compensation rate is the best action to take, I’m prepared to consider other options,” Bibeau said. “But before we have this discussion on additional improvements, we have to agree on removing the reference margin limit.”

According to Ontario Minister of Agriculture Ernie Hardemann, the meeting was the first time Bibeau had offered a counter proposal to the one made earlier this year by the provinces, which would have seen funding levels move from a 60-40 split to one where the feds would pay for 90 per cent of BRM costs.

“To put it in perspective, this was the first time we were able to send all the provinces back home with a concrete proposal. We’ve talked about hypotheticals, we’ve talked about changes some may like and some may not, but this is the first opportunity we’ve had where the federal government has laid the cards on the table and said, ‘this is my hand, do you want to play?” he said.

Other provinces had previously expressed frustration over Ottawa’s lack of a counter proposal prior to the final meeting.

Bibeau, in turn, said she will “give time” to her colleagues to analyze the proposal and get back to her.

Changes to the programs, particularly AgriStability, have long been called for.

At the heart of the issue is the amount of money being made available to farmers applying to AgriStability and the threshold that triggers the payments to them.

Designed to support farmers who experience large declines in income, lobby groups have suggested the required losses that trigger payments from the program are too high, and the compensation received is too low.

Making it easier for farmers to access those payments, while also increasing the money received, would be costly — government estimates provided in 2019 suggest costs would increase by $400 million; but the federal government did not provide a cost analysis of the Nov. 27 proposal.

Some provinces, particularly Manitoba and Saskatchewan , contend paying their share of the program is difficult given their financial situations.

Earlier this year, Manitoba Minister of Agriculture Blaine Pedersen cast doubt on the prospect of reforms.

“We are not going there any time soon just because of the cost implications for the prairie provinces,” he told the Manitoba Co-operator June 1, saying that moving AgriStability’s payout trigger to 85 per cent instead of the current 70, and eliminating the reference margin limit, would cost Manitoba, Saskatchewan and Alberta governments millions of dollars more.

Asked if she sensed any progress was being made to find a positive outcome on the issue, Bibeau said she was “hopeful that we can reach consensus.”

“I understand that some have a fiscal challenge let’s say, but we are talking about business risk management programs so it’s kind of an insurance for farmers and it would pay out only if they have a bad year, so I’m hoping we can reach this consensus and proceed with the changes as soon as possible.”

Prospects of a short-term solution now seem unlikely. If the provinces accept Bibeau’s proposal, the changes could be implemented retroactively for 2020.

About the author

Reporter

D.C. Fraser

D.C. Fraser is Glacier FarmMedia’s Ottawa-based reporter. Growing up mostly in Alberta, Fraser also lived in Saskatchewan for ten years where he covered politics, including a stint teaching at the University of Regina’s School of Journalism. He is an avid fan of the outdoors and a pretty good beer league hockey player. His passion for agriculture and agri-food policy comes naturally: Six consecutive generations of his family have worked in the industry.

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