D.C. Fraser is Glacier Farm Media’s Ottawa correspondent. Reach out to him by emailing email@example.com.
The public has gained a clearer picture of the amount of money sitting in individual AgriInvest accounts.
What should be the takeaway?
Depending on who you talk to about it, the narrative around the program can change.
It is designed to act as a savings account for producers. According to Agriculture Canada, its goal is to help farmers “manage small income declines and make investments to manage risk and improve market income.”
By matching contributions, the government is offering free money to farmers to the tune of up to $10,000 each year (the program allows deposits of up to 100 percent of allowable net sales, the first one percent being matched — so the most a producer would contribute is $1 million).
Agriculture Minister Marie-Claude Bibeau has suggested aid to the sector is a tough sell to her cabinet colleagues when producers have money available in their AgriInvest accounts.
In 2020, there has been between $2.27 billion and $2.37 billion sitting in AgriInvest accounts. The information was released to the federal standing committee on agriculture and agri-food as part of its work reviewing business risk management programs.
On the face of it, Bibeau makes a good point. Why would the federal government offer more support to producers when they are sitting on a stack of cash in their AgriInvest accounts?
This narrative is often accompanied by a secondary story line suggesting farmers use AgriInvest as a quasi-pension plan or vacation fund.
Producers and the Conservative Party of Canada suggest the government’s argument doesn’t hold up to scrutiny, because the total amount of money isn’t significant, particularly when spread out across producers.
We now know that there are 99,673 active AgriInvest accounts.
For context, if the total amount of available AgriInvest dollars were spread out equally to registered active accounts, each account would have about $2,377 in it.
Most accounts have less than $10,000 in them, and eleven percent of all accounts would have nothing at all.
Put another way, 63 percent of producers have either not been able to make significant deposits to their accounts, or have already withdrawn the money, presumably spending it on their operations.
The federal government is expected to release a second round of information, including the number of AgriInvest accounts per year that were fully withdrawn to $0, as well as drawn below $10,000, over the past 10 years.
That disclosure will be interesting to see because it will demonstrate the degree to which producers have relied upon their AgriInvest accounts as part of their COVID-19 pandemic management strategy.
But already it’s clear producers, at least the majority of them, are not hoarding money in AgriInvest accounts.
Clearly, Bibeau and the federal government cannot continue arguing more assistance is not necessary. Most producers do not have high amounts of money available in their accounts.
At the same time, we should not ignore or discount the fact that 26 percent of producers with AgriInvest accounts have greater than $50,000 available.
That disparity is worth investigating because it makes little sense to have a government safety net potentially favouring some while disadvantaging others.
It is also yet another reason why a reform of the existing business risk management programs, including AgriInvest, is needed.
Thankfully, the pandemic has not harmed agricultural producers as significant as some expected four months ago, but hopefully the federal government will recognize that its own data shows most producers have already used the available supports and will act accordingly going forward.