Cuts still undecided Officials say many options exist and they invite farmers to give input on the proposed new supports
Despite widespread indications that significant farm support budget cuts will come out of next week’s federal-provincial ministers’ meeting in Whitehorse, a senior federal official is cautioning against presumptions.
During a background briefing for reporters on existing business risk management programs Aug. 30, department officials said the collection of existing programs paid out $10 billion during the past five years.
When asked about the impact that cuts being considered in the negotiations would have, the official insisted that ministers have yet to make decisions and even options on the table should not be “presumed.”
However, several provincial ministers who will be at the Whitehorse meeting have said that the federal government is proposing significant cuts to AgriStability that almost certainly will be approved. A key proposal is that the trigger point at which farmers can apply for a payment be reduced from an income reduction of 85 percent of a farm’s historic average to 70 percent.
Federal analysis sent to provinces suggests this could reduce AgriStability funding by close to $2 billion over the next five years. The program is cost-shared 60-40 federal-provincial.
Some of the money will be redirected to research and innovation programs and some will be applied to other government priorities including deficit reduction.
Ministers meet in Whitehorse Sept. 12-14 to sign the principles of a new five-year Growing Forward deal. It is to take effect April 1, 2013.
The officials at the briefing, a meeting in which rules do not allow speakers to be identified or directly quoted, insisted nothing has been decided. A number of options are on the table.
Ministers will decide by Sept. 14 with program details to be worked out by next spring, they said.
After complaints from farm leaders that they have been excluded during the past two years from negotiations about programs that they will have to live with for the next half decade, rural Conservative MPs across the country have been inviting farmers in the weeks leading to Whitehorse to tell them what they want in a new set of farm programs.
Farm organizations have been arguing that proposed cuts to AgriStability will “gut” the program and sharply reduce its usefulness to farmers, likely leading to underuse and its demise.
Despite the argument that decisions have not been made, in a frank session with Canadian Federation of Agriculture directors from across the country in July, assistant deputy agriculture minister Greg Meredith said keeping the levels of support that now exist is not an option.
He said Ottawa has agreed with economists and think-tanks that existing BRM spending is too rich, discourages farmers from assuming more of their own risk through private programs and reduces government ability to invest in innovation.
“The programs taken together are just too rich,” he said at a public session during the CFA summer board meeting.
And ministers see current buoyant times in many agricultural sectors as an opportune time to reduce income support in favour of investment in programs that will help the industry become more competitive, he said.
“We do want to focus on transformative change,” said Meredith. “We think now is the time for change.”
Officials said during the briefing for reporters that of the $10 billion spent during the past five years of Growing Forward programming, $1.8 billion was paid out through AgriInvest, $3.2 billion through AgriStability, $3.9 billion through AgriInsurance and close to $900 million through disaster coverage through AgriRecovery.