RED DEER, Alta. – Alberta is re-examining how it will distribute farm safety net money since the federal government said it will pick up the province’s share of the Net Income Stabilization Account.
Ottawa plans to redirect money from Alberta’s share of a safety net fund to cover farmers who choose to stay in the program after the provincial government stops its contributions.
“We’re going to have to look at the total safety net package and make some adjustments and reallocation,” said Alberta agriculture minister Walter Paszkowski.
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“There is no new money so we’re going to have to look at the existing safety net programs that are in place,” he said in an interview.
Alberta said it was leaving the program because it contains flaws. The province said NISA is susceptible to challenges under international trade laws and offers inadequate help to beginning farmers.
Since Alberta decided to quit NISA, several commodity groups like the forage growers applied to the federal government to join the program.
Not commodity specific
Paszkowski said he has no problem with new commodities like hogs or forage crops being added to NISA. However, he feels the province’s farm income disaster program offers better protection in the long run because it covers overall income drops rather than a failure in a specific commodity market.
As well, participation in NISA by Alberta farmers is not that high, said the minister. About 22,800 farmers pay into NISA. There are about 59,000 farmers in Alberta.
Recently released statistics on NISA show of those involved, 67 percent have less than $10,000 in the account.
“The average payout to date on our farm income disaster program has been something like $12,000. Once you’ve exhausted your $10,000 or less that you have in the program, there’s nothing left,” said Paszkowski.
To ease some of the financial burden, Alberta recently announced a reformed crop insurance program where average premiums will drop an average of 25 percent for farmers.
Under the new format, farmers pay 20 percent of the premium for insurance covering 50 percent of their crop’s value. Farmers share the costs for coverage above that equally with government.
The federal and provincial governments will pick up the rest of the cost.
The minister expects better participation in the new insurance and as more join, future premiums could be lowered.
