Risk management program review moving at snail’s pace

Little progress appears to have been made nearly five months after a one-year review of business risk management programs was announced.

“I see it moving forward very, very, very slowly,” Saskatchewan Agriculture Minister Lyle Stewart said Nov. 28 when asked about the review.

“I expected by now that we’d actually be into the meat of the review, but really they’re just getting organized.”

The review was announced in July at the meeting of Canada’s agriculture ministers in St. John’s, N.L. It is supposed to examine the effectiveness and impact of BRM programs, particularly AgriStability.

Officials are to recommend options for ministers to consider next July. An external expert panel is also to provide input during the process.

However, Canadian Federation of Agriculture vice-president Norm Hall said little is happening.

“We are disappointed at the progress of the government review,” he told the Agricultural Producers Association of Saskatchewan annual meeting.

“We are now five months in and the committees have not yet been announced.”

The CFA hasn’t officially asked for an extension to the review, but Hall said that could happen.

“Are we going to be doing all this work through seeding again?” he said. “I hope not.”

Agriculture Canada said in an emailed statement that officials have been meeting, and the expert panel “has been identified and will begin their work shortly.”

However, the Ag Growth Coalition members, along with the Canadian Pork Council and Canadian Cattlemen’s Association, are going to do their own review.

The coalition includes CFA, Grain Growers of Canada, Grain Farmers of Ontario, the Canadian Canola Growers Association, the Canadian Horticultural Council and the National Sheep Network.

Scott Ross, the CFA’s director of business risk management and farm policy, said the idea is to feed into the federal-provincial process to compel it to look at all areas.

The federal government wants to increase agricultural exports by $11 billion by 2025, and a report from Finance Minister Bill Morneau’s council of economic advisers earlier this year singled out the sector for unprecedented growth, he said.

This will mean new risks and opportunities for producers that status quo BRM programs won’t necessarily address, particularly because no more money was allocated than what was in the last five-year agreement.

The organizations are hiring a consultant to start the review. It will examine the risks and opportunities facing agriculture, how the industry is evolving and how programs respond.

The second phase will be to look at the scope of potential reform. The federal-provincial review is being done with cost neutrality in mind, Ross said, yet AgriStability is paying out $300 million a year even during historically good years.

The final phase will examine program design.

Ross also said everyone would be much better off if there is ongoing dialogue about BRM programming rather than “radio silence” once an agreement is signed until the next negotiation starts.

Last July, the provinces did agree to some changes to AgriStability and AgriInvest for 2018-23 that are still causing concern.

The reference margin limit under AgriStability will be capped at 70 percent in order to make sure that producers with low cost structures — cow-calf operators who grow their own feed, for example — can still get support.

There is also a late participation mechanism that would allow producers to enter the program late but with a 20 percent penalty.

“This is an effort to address concerns that only 33 percent of farmers are in AgriStability,” Ross said, but it is unlikely to stop the downward trend because it addresses a symptom rather than the problem with the program structure.

Saskatchewan has said it won’t allow late participation, and others are likely to do the same.

AgriInvest matching contributions from government were cut to $10,000 per year in an attempt to maintain cost neutrality. This has also caused concern.

“It was a very last minute change,” Ross said.

“Industry wasn’t consulted very well on this and it ruffled a lot of feathers. Again, it speaks to a discussion that we’ve seen focused too much on budget and not enough on where we’re trying to go on program objectives and policy.”

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