$2 billion in savings Canadian Federation of Agriculture says cuts will render the farm income stabilization program useless
TORONTO — Canadian Federation of Agriculture leaders are accusing the federal government of planning to “gut” the AgriStability program in talks being held behind farmers’ backs.
During a July 26 session between CFA board members from across the country and assistant deputy agriculture minister Greg Meredith, the senior federal bureaucrat confirmed that cuts are coming. He argued that current farm support programs are too “rich” and deter investments in farm innovation and competitiveness.
The federal government sees the current strong incomes for many in agriculture as a good time to switch the focus from farm support to more market competitiveness.
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“We do want to focus on transformative change,” Meredith told agitated farm leaders. “We think now is the time for change.”
However, the government will continue to support farm income risk management programs, he said. Some government-funded business risk management will be required “but now we are doing too much.”
In mid-September, federal and provincial agriculture ministers meet in Whitehorse to ratify the principles of the next Growing Forward framework of farm programs that almost certainly will include a sharp reduction in AgriStability support and possibly caps on payments to individual farms.
Federal agriculture minister Gerry Ritz is driving the push for a significant change in the focus of farm support and investment programs.
Although the talks have been underway for more than two years, farm groups had been told few specifics.
However, federal calculations sent to the provinces predict that changing the trigger point for AgriStability payments from an income drop to 70 percent of a farm’s five-year average income (with the highest and lowest years dropped from the equation) from the current 85 percent could save both levels of government more than $2 billion over the next five years — $1.2 billion in lower spending from Ottawa alone.
Some but not all of those savings would be reinvested in non-business risk management programs to promote competitiveness. The rest likely would be applied to deficit reduction.
The new farm program framework is slated to take effect April 1, 2013.
During the session at the CFA summer board meeting, farm leaders from across the country insisted the changes would make AgriStability ineffective for many.
“The current exercise of gutting the (AgriStability) program is not about risk sharing but risk shifting,” Ontario Federation of Agriculture president Mark Wales told the Agriculture Canada official.
CFA first vice-president Christian Lacasse from Quebec told Meredith it was “hard for me to sit still” when he heard him say farm programs are too generous.
“I think really what we are hearing is that these are changes aimed at undoing the program,” he said. “A 70 percent trigger will make the program useless for most farmers. The next step will be to get rid of it because farmers say it is not useful. You are talking about destroying the program.”
Earlier in the day, former CFA president Bob Friesen said it was “unethical” that Ottawa now wants to reduce AgriStability payment thresholds just as high grain prices finally are allowing farmers to build better margins that would protect them when the next price downturn comes. Friesen is now with Farmers of North America.
And for cattle and hog sectors struggling with low margins that have made AgriStability an ineffective program for them in the past, the changes would totally destroy its usefulness, said CFA second vice-president Humphrey Banack from Alberta. “If we gut some of these programs, they are not going to work for some sectors.”
