AgriStability cap | Lower historical reference margin will eliminate incentive to reduce inputs
The Saskatchewan Association of Rural Municipalities has significant reservations about the Growing Forward 2 agreement and will be lobbying governments to change it.
SARM was hoping for a strengthening of the AgriInvest program. Instead, the provincial and federal governments agreed to decrease the matching deposit in the savings account to one percent of allowable net sales from 1.5 percent.
“We were disappointed to learn that government funding for AgriInvest is going to be reduced,” Laurel Feltin, SARM’s director of policy, told delegates attending last week’s midterm convention.
The organization was also disappointed to learn that starting in 2013, the AgriStability program trigger will be 70 percent of a producer’s historical reference margin, down from 85 percent under the old program.
However, SARM is particularly concerned that payments will be capped at the lower of the historical reference margin or the average of allowable expenses.
“Basically it’s going to create a scenario where the incentive to lower input costs will be lost,” said Feltin.
“By reducing your input costs, you would actually reduce any payment you would trigger from AgriStability, so it kind of seems like a disincentive.”
She said the purpose of the program is to protect producers in times of volatility, and it doesn’t make sense to base it on margins and expenses when fertilizer, fuel and commodity prices have all been volatile in recent years.
“We are going to continue to raise this issue. We would like to see a change for sure,” said Feltin.
SARM would like to see more research money spent on the livestock and forage industries and a renewal and expansion of the Farm and Ranch Water Infrastructure Program.
Feltin said the federal government is about to launch formal consultations on a new Species at Risk Act.
Farmers can now be fined up to $250,000 or imprisoned for causing inadvertent harm to species at risk through normal farming activities, although Feltin said the current act has no teeth in that regard.
SARM wants the new act to eliminate all producer liability and reward farmers who set aside land for species at risk.
“We still have to be profitable in the ag sector and (the act) can’t conflict with that,” said Feltin.
She had good news for producers about the Census of Agriculture.
“Any agriculture producer I know hates filling out the ag census. It’s a long form, it takes a long time and not only that but it’s in May, one of the most difficult and busy times for agriculture producers,” said Feltin.
SARM recently attended a workshop about changing the census.
“I can tell you that I really think it’s going to be shortened this time, so that’s good,” she told delegates.
Feltin believes the federal government will eliminate nine questions from the census.
“They don’t have money to make the form long. They want to make sure they’re not asking anything that costs extra money.”
SARM has been lobbying Ottawa to collect financial data from other programs such as crop insurance, income tax and AgriStability instead of requiring farmers to fill out that information on the census.
“They said they are looking at that. They are testing a system right now where they can actually pull that data from these various other programs,” said Feltin.