Letter to federal agriculture minister focuses on business risk management, specifically AgriRecovery and AgriStability
The parliamentary committee studying business risk management programs has highlighted potential changes in a letter sent to Agriculture Minister Marie-Claude Bibeau.
The chair of the standing committee on agriculture, Liberal MP Pat Finnigan, wrote the letter in advance of the July 3 enrolment deadline for AgriStability so that Bibeau could work with her provincial and territorial counterparts “to implement more effective, flexible, timely and equitable programs for farmers.”
Citing testimony from nearly 40 witnesses between May and July, Finnigan said in his letter that disasters — including diseases and weather events — have increased in frequency in recent years.
“Faced with this unprecedented crisis, several witnesses told us that the rapid establishment of an emergency fund to deal with this disaster would be necessary. This could notably involve an extension of the eligibility criteria of AgriRecovery to include major crises such as pandemics.”
Currently, AgriRecovery is designed as part of the federal and provincial effort to help agricultural producers recover from natural disasters and focuses on the extraordinary costs they take on to recover from those disasters. It was expanded during the COVID-19 pandemic to, in part, act as a set-aside program for beef and pork producers.
Finnigan, on behalf of all committee members, also took aim at AgriStability. During witness testimony, AgriStability was by far the main focus of concern from producers and industry stakeholders.
Participation in the program has dropped significantly since 2012 — the year before the program was reformed in 2013. Designed to support producers experiencing large margin declines, fewer than 50 percent of eligible producers have signed up for it in recent years.
“Many witnesses explained that this limited participation rate is the result of the administrative burden imposed by the program. They argued that application processes need to be simplified. The witnesses also called for payments to be issued faster,” wrote Finnigan. “The Union des Producteurs Agricoles reported that payments can sometimes take up to 18 months to arrive. Such lengthy time frames reduce the program’s ability to address emergencies, and businesses sometimes receive the funds they need too late.”
MPs on the committee also raised the issue of payments made under the program because the program only pays producers after their margins have fallen below 70 percent of their five-year Olympic average reference margin.
“The stakeholders the committee heard from requested that this threshold be raised to 85 percent. Some witnesses asked that the program’s coverage level be also increased and that the limits on the reference margin based on allowable expenses be removed,” read the letter. “The latter measure would improve funding access for industries that generally have lower expenses, such as businesses in the beef, horticulture or beekeeping sectors that cannot fully benefit from the program because they typically have lower allowable expenses.”
Witnesses, the letter said, also reported AgriStability was not well-suited for small farms or diversified operations.
Citing testimony from the Canadian Federation of Agriculture, Finnigan wrote about how the AgriInsurance crop insurance program — the largest business risk management program in monetary terms — doesn’t cover livestock and certain horticultural products in many provinces and territories.
“While some provinces have implemented programs to fill these gaps, multiple witnesses said that provincial and territorial governments sometimes lack the financial resources to unilaterally implement such programs and that federal contributions are needed,” the letter said.
The letter also argued that while the Advance Payments Program helps farmers manage risk, it also creates more debt for producers at a time when they are already highly leveraged.
We encourage the Government of Canada to consider new concept BRM programs that will address the complex diversity of agriculture and any new program that will assist in creating local, stable and secure food production for all Canadians.
Bibeau was expected to meet with her provincial and territorial cohorts to discuss changes to BRM programming this summer, but the pandemic has delayed that meeting until October.
Finnigan concluded the letter from the committee by telling Bibeau that MPs hope it will help her better address the concerns of the agriculture and agri-food sector.
The majority of concerns raised by witnesses and now the committee are long-standing and well-known, but how Bibeau and her provincial counterparts will respond is unclear. Many of the changes, including raising the reference margins under AgriStability, are estimated to cost hundreds of millions of dollars.
Governments across Canada were hesitant to make such changes before the pandemic, and doing so in the coming months would have a tangible impact on finances.