Pressure is building on federal and provincial governments to quickly reform the country’s main farm support program after a damning report from the federal auditor general on the Canadian Agricultural Income Stabilization program.
Auditor general Sheila Fraser said in a report to Parliament May 1 that the four-year-old CAIS program has been too complex, unpredictable, slow and secretive.
Her auditors found evidence that possibly thousands of farmers have received less than they deserved and yet CAIS administrators concentrate more on clawing back overpayments than on correcting underpayments.
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Applications that do not trigger a payment are not routinely reviewed to ensure an error was not made.
“Since the completion of the audit, the government has announced its intention to change the CAIS program,” Fraser told a news conference.
“In reviewing the program, the department should look for ways to simplify its delivery of farm income support and make the process more user-friendly.”
Farm leaders and the Conservative government took the Fraser report as vindication of their complaints about the program, its design and performance.
“When this CAIS program was first developed, when it first came out, there were plenty of warnings from industry and from the then-opposition that the CAIS program would not work the way it was originally designed,” agriculture minister Chuck Strahl told the House of Commons agriculture committee hours after the scathing report was made public.
“We said it was too complex and that it would not deliver the way it should.”
Strahl said changes that have been made and will be made to the next generation of farm programs will fix the problems identified by the audit.
“We believe that we will have farm financial programs that are simpler, more predictable and bankable, all things identified in the AG’s report.”
One of the toughest reactions came from Grain Growers of Canada, which called on the CAIS administration to be clear with all producers about what changes have been made to their applications and how that affected their payment.
GGC was reacting to Fraser’s conclusion that application processors regularly change information in farmer submissions if they think it is incorrect. They do not inform the farmer.
The auditors found that the unilateral changes often reduced payments but it was up to producers to figure out what had happened.
One of the most startling discoveries was that while processing 2004 program year applications, a change in procedure increased one payout by more than $90,000. Although almost 20 percent of applications already had been completed, the earlier ones were not recalculated and producers were never told.
“When you see a single change being made, internal to the administration, that increased one producer’s claim by $90,000, you have to wonder what kind of money has been left on the table for others,” said grain growers president Ross Ravelli.
In Manitoba, Keystone Agricultural Producers’ president David Rolfe said governments must react quickly: “This report validates what farmers have been saying all along so that’s some small consolation.”
In Ontario, farm groups demanded an audit of Agricorp, the provincial government organization that delivers farm programs.
“When reports and payments arrive consistently late, it results in major inefficiencies throughout Ontario’s farming industry,” said Ontario Federation of Agriculture president Geri Kamenz.
National Farmers Union women’s president Colleen Ross said the auditor’s report revealed a CAIS mess much worse than most expected. The lack of a program payment cap meant that in 2004, 12 payouts of more than $1 million were made, including a multimillion-dollar payment to Saskatchewan Wheat Pool.
“At the same time, many farmers were denied payments for unspecified reasons,” she said. “Still others were forced to repay overpayments months after funds had been spent.”
