Canadian cattle producers want a national price insurance program in place as soon as possible.
The program would be based on the Alberta model but modified to suit all provinces, said Bob Ivey, chair of the Canadian Cattlemen’s Association’s domestic agriculture committee.
Alberta is set to begin its program at the end of August.
Ivey said federal and provincial agriculture ministers asked officials at their July meeting to examine ways to implement livestock insurance. That was good news to those who have long argued existing business risk management programs don’t work for the sector.
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Officials and a working group have already started in Saskatchewan.
Producers at the recent CCA semi-annual meeting agreed the program must focus on price rather than production. The idea is to cover risk.
Ivey emphasized that insurance would be a tool.
“It’s not a panacea that’s going to fix the livestock industry,” he said in an interview.
“It would take out severe dips in the market.”
While Alberta’s program is just for fed cattle, a national program would have to include the cow-calf sector.
Ivey said the challenge for officials is to develop something that is effective and affordable.
“We have to make sure that the coverage is adequate to be effective,” he said. “You don’t want it so low that no one cares.”
Affordable premiums
Producers also have to be able to pay for it. It would operate similar to crop insurance in that premiums would be cost-shared by producers and the provincial and federal governments.
CCA president Brad Wildeman said premiums must be realistic or producers won’t buy it.
“If we don’t believe we’re going to use it, don’t promote it,” he said of a national program.
The agriculture ministers said the new program had to be developed with existing funds. Ivey said money could be moved from AgriStability, which doesn’t work for livestock.
It would be bankable, predictable and transparent, he added.
For example, if calf prices are low and a producer decides to hang on to them longer, he could provide his banker with a minimum price.
The committee passed a motion that the CCA aggressively lobby Ottawa to develop price and basis insurance as a “first line” risk management tool.
Ivey said there is no deadline, although the ministers want to discuss potential approaches at their next meeting and ideally a program would be in place in time for next spring’s calf crop.
Grant Zalinko, a beef analyst with the Saskatchewan agriculture ministry, said the issue is high on agriculture minister Bob Bjornerud’s agenda.
“He would like something to take back in January,” he told the meeting.
Concerns over possible trade challenges will be identified and explored, he added.
Model to avoid
Producers at the meeting said they don’t want something like the former Cattle Options Pilot Program from 1995. That program didn’t cover basis and was sold as a derivative rather than as insurance. Only about 135 producers participated.
Zalinko said more producers should use a properly developed program.
“If you develop it now and it’s effective … when better prices come you’ve got an effective product,” he said.
