EDMONTON – Alberta will go to the next federal-provincial agriculture ministers’ meeting Dec. 18 with a plan and a promise.
The promise will be an announcement by agriculture minister Walter Paszkowski that Alberta is pulling out of the Gross Revenue Insurance Plan next year.
The plan will be a replacement “bare-bones” safety net – a ‘GATT 70’ program that would guarantee a farmer 70 percent of his historic gross margin between market income and costs of production.
The plan would include an improved crop insurance program and a fund built up by farmers, without government matching dollars. In years when a farmer’s gross margin falls below the historic average, he would have to tap into his own funds first for income up to 70 percent of the average.
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
If that still is not enough, the Alberta government would kick in the rest.
“This would not be an income security program in the traditional sense,” Paszkowski said. “It is protection against a wreck.”
He said the requirement that farmers set aside some of their own money and use it first in a bad year would deal with the “moral hazard” risk – the chance that farmers might manipulate their income or cropping simply to tap into government funds.
And the GATT 70 program would make money available to beginning farmers, he said.
“Any new program has to address the needs of beginning farmers and NISA (Net Income Stabilization Account) certainly doesn’t do that,” he said.
Six percent of Alberta farmers account for 74 percent of the NISA savings in the province, he said. “They are the established farmers, not the struggling beginner.”
Paszkowski said Alberta will be trying to sell its program as a model for a new national program. If not, the province might have to act on its own.
Without protection
“We have to do something for the taxation year 1995,” he said. “A lot of our people are out of tripartite now and are naked out there. GRIP is not really doing the job and I have never been a NISA supporter.”
The Alberta government proposal is supported by a broad coalition of provincial farm groups that helped draw it up.
