It seems there is more talk about government programs these days than ever before. The federal and provincial governments have started a consultation process to develop the next suite of programs to replace Growing Forward, which is the package that includes AgriStability, Agri-Invest, AgriRecovery and crop insurance. The goal is to create business risk management programs.
The idea is all right, as long as producers don’t think that because governments will manage the risks for us, we can take more risks. Most people tell me that they believe in free markets and free enterprise and they don’t want government involved in their business except in the case of disasters.
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The problem is that lately our industry has become so vulnerable that every issue is a disaster. Our real goals should be to create an industry where individual cattle producers can manage their own risk.
Most farmers have supported crop insurance as it’s a way to deal with weather related issues. Changes to crop insurance are required to ensure that equivalent protection is afforded to grass and forage crops as well as annual grain crops.
Crop insurance is actually production insurance with a plan to be able to insure all commodities. The cattle industry has been unable to develop a production insurance program that adequately protects our business.
However, there is a request by some to insure the price paid for our cattle. Price insurance has evolved because of this. The Saskatchewan Stock Growers Association supports the concept of a price insurance program where producers could insure a future price based on the current market signals.
This would not be a support program. It would be only a tool you could use to lock in a price based on a prediction of the price at a certain point in time. The producer would then pay a premium to protect against any price drop.
Alberta has this program for cattle fed in that province. The goal is to create a national program for all Canadian cattle producers that would cover cow/calf, feeder and fed cattle sectors.
The Alberta program is operated by the province with producers paying 100 percent of the premium. This kind of program would need government involvement with regard to administration and guarantees.
However, the SSGA does not believe the government should pay any part of the premium. There is a real risk of trade action if the government gets involved.
The cattle industry in Canada relies so much on foreign trade that we cannot risk a countervail action by other countries. I also think that for this program to remain market neutral, and not disadvantage producers who choose not to be involved, the people who choose to buy this type of insurance should have to pay the full cost of all premiums.
Calvin Knoss
President, Saskatchewan Stock Growers Association Regina, Sask.
