Declining participation, unpredictable coverage identified as reasons federal ag support program needs revamping
Canadian grain growers are calling for a more in-depth look at how to fix AgriStability.
Participation in the business risk management program has declined significantly since changes were made in 2013 for Growing Forward 2. The payment trigger went from 85 percent of a farmer’s historical reference margin to 70 percent, and reference margin limitations were imposed.
Since then, farmers have called for a return to the original parameters for better coverage.
Last week, farm organizations told the House of Commons agriculture committee, which has now begun studying the next policy framework, that farmers value BRM programs but are worried about coverage in the face of declining prices and bad weather.
Fiona Cook, executive director of Grain Growers of Canada, said her organization is working with others to try to find a way to make AgriStability work.
She said participation dropped from 60 percent in 2007 to 36 percent in 2013 and continues to go down.
“Reduced participation combined with unpredictable coverage rendered it an unreliable program, which offers little stabilizing security in the event of a market shock,” Cook said.
“Farmers don’t know when and how much they’ll be paid and this leads to risk aversion, less desire to innovate and in particular does not help young farmers who face the greatest risk and financial exposure in the early part of their careers.
“Farmers do not have faith in the program.”
Canadian Federation of Agriculture president Ron Bonnett said farmers see AgriStability as the backbone of farm support but no longer consider it to be a credible program.
“To re-establish credibility and participation, the program needs to provide support capable of keeping farms viable following income declines,” he said.
However, while CFA and many others have called for a return to the 85 percent trigger, the GGC said that might not be enough.
“We believe that a simple return to the 85 -percent coverage rate and margins included in Growing Forward 1 may not be the optimal solution,” Cook said.
“We’re suggesting a deeper dive to figure out where the issues are and propose workable solutions.”
Canadian Canola Growers Association president Brett Halstead said he no longer participates in AgriStability because of the reduced coverage, lack of predictability and complex application process.
He, too, said returning to previous program levels won’t address all the concerns.
“Canadian Canola Growers Association recommends a national committee of associations be established to further explore the effectiveness of the current suite of programs and make recommendations on how to refine them in the next agriculture policy framework,” he told the committee.
Halstead said this should include organizations across agriculture, not just the grain sector.
“We don’t necessarily have a solution,” he said.
“We do need to do something better than where it’s at now.”
Federal officials said they recognize the dissatisfaction with AgriStability. They have been meeting with stakeholders and conducting an online survey about what the next APF should look like.
Rosser Lloyd, director general of Agriculture Canada’s business risk management directorate, said the BRM programs under Growing Forward 2 haven’t really been tested in a downturn, and reference margins have been building under good grain prices.
“I think we’re riding in with some fairly good coverage under those programs,” he said.
“Are they going to hold up to what might come? Our suggestion is that they will pay out substantial amounts of money if we experience a significant downturn, but we need to continue to engage the industry on it.”