The federal government is preparing to mail cheques to farmers in partial compensation for cost-of-production increases during the past four years.
Agriculture minister Chuck Strahl has announced that the promised $400 million in COP money will start to flow by the end of June and payments should be completed by the end of August.
Eligible farmers include those not in supply management who had taxable farm income in 2004 and those who started to farm since then.
Farmers who reported income in 2004 will receive $2,360 for every $100,000 of average net sales over the 2000-04 period. New entrants will receive the same payment for 2005 and 2006 net sales.
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Strahl said it is part of a new deal for farmers from the Conservative government after the “dark, sad, depressing era of farm policy brought in by the Liberal government. The dark sad era is over. The good times are rolling.”
The announcement drew rave reviews from some farm leaders.
“News like this makes it more worthwhile to climb onto the tractor for spring planting,” said Ontario Federation of Agriculture president Geri Kamenz.
Ontario farmers will receive up to $75 million of the federal funds, he added. As well, he called on the Ontario government to add another $46 million to the pot as the provincial share, even though Ottawa said its retroactive COP payments would not require the normal 40 percent provincial contribution.
Kamenz said the timing was good.
“We have earlier bills to pay and planting expenses to add to the stack,” he said in a statement released by the OFA. “This announcement by minister Strahl could not have come at a better time.”
Grain Growers of Canada executive director Richard Phillips said farmers will welcome the money, although the cheques typically won’t be large.
“This won’t be enough to save a farm but it symbolizes to producers this is a government prepared to stand behind farmers,” he said in an interview.
However, Phillips said the fact that Ottawa has to announce an ad hoc payment to compensate farmers for production cost increases illustrates the flaws in the existing safety net programs.
“This is an indication of the problem with the whole suite of safety net programs that we have,” he said. “If they were working properly, we wouldn’t need ad hoc programs like this.”
Leaders in the cattle sector are the main critics of the cost-of-production program, worrying it could be a target for a trade challenge.
Agriculture Canada says farmers who applied for Canadian Agricultural Income Stabilization money for the 2004 program year will receive their cheques automatically.
If they farmed that year but did not apply to CAIS, or if they started to farm in 2005 or 2006, producers will have to apply by Sept. 1. Application forms will be available in late May and information on the program is available at www.agr.gc.ca/cop.
The government has also promised that over the next five years, $100 million per year will be available for COP increases. If triggered, it will be deposited in a new farmer-contributory savings account program being created as a top tier for CAIS.
