The $995 million farm aid package announced May 22 could save the government’s new farm safety net program as much as $275 million in claims for 2004, according to Agriculture Canada calculations.
Money paid out under the Transition Industry Support Program – $680 million to the cattle industry, $250 million to general agriculture and $65 million to cover 2002 claims under an earlier program – will be counted as revenue for the year, reducing later aid claims eligibility.
Danny Foster, acting director general of program planning and performance for Agriculture Canada, said the money is not being treated as an advance on 2004 payments from the Canadian Agricultural Income Stabilization program. “It will not be clawed back dollar for dollar.”
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But as revenue, it will lower payments under CAIS.
“We estimate on the cattle portion there will be a $200 million offset in CAIS and on the $250 million, there will be an additional $75 million,” he said.
Defenders of the program say that quarter billion dollar impact on other safety net eligibility does not undermine the value of either the federal announcement or the CAIS commitment.
“There will be some savings for government but it won’t be clawed back dollar for dollar,” said agriculture minister Bob Speller. “And this is money that will get there more quickly than CAIS. It is a bridge to CAIS.”
Bob Friesen, president of the Canadian Federation of Agriculture, said any saving in CAIS payouts this year will mean more money for CAIS payments in later years.
“There will still be five and a half billion dollars left in CAIS,” he said. “It could save CAIS money this year but the CAIS money will still be there for use in later years.”
On March 29, application forms for the support payments, based on $80 a head for cattle other than mature bulls and cows that have calved that were on-farm or in feedlots Dec. 23 were available through the departmental website at www.agr.gc.ca/tisp or by calling 866-367-8506.
However, as details of the announcement sunk in last week, the program also heard its share of critics.
Cow-calf producers complained they had been shut out while large feedlot owners will receive the bulk of the money. There also was controversy about whether packing plants that own an estimated 10-15 percent of cattle will receive payments.
Agriculture Canada red meat division assistant director John Ross said packers would be eligible for payments if they report any income as farm income. Packers such as XL Beef and Lakeside Packers own feedlots that would be classified as farm income and therefore would be eligible for a share of the program.
