A federal committee of MPs is making recommendations to Agricultural Minister Marie-Claude Bibeau on how to approve Business Risk Management (BRM) programs in Canada.
It is expected changes to BRM programs will be announced in July, following a meeting in Guelph, Ont. of Bibeau and her provincial colleagues.
The recommendations are coming after a study by MPs sitting on the Standing Committee on Agriculture and Agri-Food was conducted, featuring stakeholders from within the industry and government.
Tom Rosser, assistant deputy minister for Agriculture and Agri-Food Canada (AAFC), said the federal government is looking at a number of options to improve the programs, which are often the focus of complaints from producer groups.
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“We have heard a number of ideas from producers. In addition, we are having proactive discussions with the provinces to understand their perspective on these issues and to come to a consensus on reforms. We are considering a number of options,” he told the committee.
While some form of crop insurance has been in place in Canada since the 1950s, the current iteration of risk management support began in 2003 when provinces and the federal government agreed to standardize supports in a cost-shared policy framework.
Although originally the programs were focused on income stabilization, provincial and federal governments realized they were covering, “What would be considered normal business risks in many cases,” according to Paul Samson, an AAFC assistant deputy minister.
There were also consecutive years of strong commodity prices, resulting in higher levels of profitability and justification for governments to allocate funding away from risk management towards other areas, such as innovation and growth.
The current agreement between federal and provincial government’s was signed in 2017 and carried forward five programs aimed at BRM: AgriStability, AgriInvest, AgriInsurance, AgriRecovery and AgriRisk.
Canadian Federation of Agriculture vice-president Chris van den Heuvel said the BRM programs are now creating a “distinct competitive advantage” for Canadian producers when they are faced with risks beyond their control, such as global pandemics, trade wars and railroad blockages.
He told MPs BRM programs in Canada are, “failing farmers” and coverage “does not keep pace” with the difficulties faced by farmers as the programs do not provide “meaningful support.”
Minor changes to AgriStability, made in December when Bibeau last met with her provincial counterparts, were characterized as modest by van den Heuvel.
“They fail to address concerns,” he said.
Those changes agreed upon were meant to incentivize farmers to seek out more private insurance to “top up” their coverage beyond what the federal government offers and launched a pilot program aimed at reducing concerns over the administrative burden applying for BRM programs entails.
More details of those changes are not yet available, but government officials are cautiously optimistic they will help improve enrolment in AgStability. In 2016, only 31 per cent of eligible producers, representing approximately 56 per cent of market revenues, enrolled in the program.
AgriStablility, which provides support to farmers experiencing large income declines, has long been the focus of most complaints regarding the suite of BRM programs. Beyond concerns of cumbersome paperwork, producers argue reference margins should be lifted from the current 70 per cent to the pre-2013 level of 85 per cent.
