Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at firstname.lastname@example.org.
If you had to choose between an enhanced AgriStability and an enriched AgriInvest, which would you pick?
Many farm groups have long been calling for improvements to AgriStability, a rollback of the changes made years ago by the previous Conservative government. The calls for change have become louder during the pandemic.
While some sectors of agriculture have legitimate farm income worries exacerbated by the pandemic, the grain industry is looking at a pretty good year. With money flowing out of Ottawa in a COVID-19 gravy train, some in the grain sector seem to think it’s a good time to press for program enhancements, even though any immediate urgency is lacking.
Contrary to popular belief, the main reluctance to enhancing AgriStability isn’t actually coming from the feds; it’s coming from provinces like Saskatchewan and Manitoba where the extra cost would be a big burden on a per capita basis.
Because western provinces won’t ante up their share, it appears improvements to AgriStability are not in the cards, at least not in the near term.
What about reallocating dollars among the business risk management programs? What about ending AgriInvest and using that money to improve AgriStability?
I suspect this approach would be wildly unpopular. Producers like the free government money that comes through AgriInvest — money that comes in good years and in bad. It may not be a huge amount as compared to farm expenses, but over the years it adds up.
What if the switch was the other way? What if AgriStability was ended and that money was used to enrich AgriInvest? For sake of argument, let’s assume the maximum government contribution could be doubled to two percent of eligible net sales bringing the maximum to $20,000 per farm entity per year, rather than the current $10,000.
Disaster support through AgriStability would be gone, but a lot of producers have given up on it anyway. Most reports indicate that fewer than half of producers are even enrolled in the program anymore. For that reason, I suspect reallocating AgriStability funding to AgriInvest would find favour in many quarters.
Unfortunately, we’ve never come up with a stated objective for business risk management programs in this country. Crop insurance (AgriInsurance) works reasonably well to protect against yield losses. Continuous tweaking has made it a reliable program in which most grain producers participate.
But should the other farm safety nets be there to protect against precipitous income shortfalls (AgriStability) or do farmers deserve steady, methodical income support (AgriInvest)? What level of support is reasonable and achievable?
And what do taxpayers receive for their investment? Does it really keep more farmers on the land? Does it result in more grain for domestic consumption and export? If the programs ended, would consumers notice any difference?
It would be interesting to do an analysis of how much the business risk management programs have contributed to the rising value of farmland. I suspect crop insurance has the largest influence, followed by AgriInvest with AgriStability a distant third.
Some producers tap into their AgriInvest money nearly every year. They need the funds. Others let the money build and intend to use it as a down payment on a machinery or land purchase or for retirement. The billions of dollars sitting in accounts lead governments to believe that farmers don’t need additional help when that might not be the case.
Enhancing AgriInvest might be poor policy, but it would be a popular move.