TORONTO — For the first time, a senior Agriculture Canada official has confirmed to farm leaders that the five-year agriculture policy taking effect next year will feature deep farm support cuts.
According to provincial sources, cuts could reduce federal and provincial projected business risk management spending by more than $2 billion over the next five years.
The likely result will be agreement to reduce the AgriStability payment trigger from losses below 85 percent of historic margins to losses below 70 percent.
While some of those savings will be invested in as-yet unspecified competitiveness and innovation programs, much of it likely will be applied to government deficit reduction efforts.
Greg Meredith, assistant deputy agriculture minister in the strategic policy branch, went into the lions’ den of the Canadian Federation of Agriculture summer director’s meeting July 26 to confirm that a federal priority is to reduce farmer entitlement under the AgriStability program.
During a frank and sometimes-angry session with CFA leaders from across the country, he said Ottawa has agreed with economists and think tanks that existing BRM spending is “too rich, discourages farmers from assuming more of their own risk through private programs and reduces government ability to invest in innovation. The programs taken together are just too rich.”
And ministers see current buoyant times in many agricultural sectors as an opportune time to reduce income support in favour of investment in programs that will help the industry become more competitive, he said.
“We do want to focus on transformative change,” said Meredith. “We think now is the time for change.”
Outraged CFA provincial and national leaders condemned the proposed cuts and the fact that farmers have not been privy to details that federal and provincial ministers expect to ratify in Whitehorse at a mid-September meeting.
They argued it would lead to the end of margin-based AgriStability, the cornerstone of farm income support programs.
They vowed to try to mobilize their provincial agriculture ministers to resist federal proposals but also conceded the principles of the cuts likely are a “done deal’ and the best farm organizations can hope for is to influence design of programs that will take effect April 1, 2013.
“The current exercise of gutting the (AgriStability) program is not about risk-sharing but risk shifting,” Ontario Federation of Agriculture president Mark Wales told the Agriculture Canada official.
CFA first vice-president Christian Lacasse told Meredith it was “hard for me to sit still” when he heard him say farm programs were too generous.
“I think really what we are hearing is that these are changes aimed at undoing the program,” he said. “A 70 percent trigger will make the program useless for most farmers. The next step will be to get rid of it because farmers say it is not useful. You are talking about destroying the program.”
CFA president Ron Bonnett told Meredith a core issue in farmer anger is that governments have been negotiating in secret for several years with no ability of farmers to analyze potential impacts of proposals and then advise on best options.
“I told him this lack of engagement is unlike anything we have seen with previous program design,” said the Ontario farmer. “He agreed it is a different process.”
But Meredith also bluntly told the farm leaders that they should expect significant program change after ministers meet in Whitehorse Sept 12-14.