Federal, provincial and territorial ministers of agriculture will meet Nov. 20 and Nov. 27 to discuss improving business risk management programs.
Federal agriculture minister Marie Claude Bibeau said she is confident counterparts from Quebec, Ontario and British Columbia will be willing to contribute their share to make significant improvements to AgriStability, the program most criticized by producers.
“It’s going to be more challenging with the prairie provinces and some other provinces, who are saying that they have more financial or fiscal constraints,” she said.
BRM programs are funded by federal and provincial governments at a cost-share ratio of 60-40. The cost has averaged roughly $1.5 billion in the past five years, but is expected to be higher this year because of the pandemic.
Consecutive years of strong commodity prices justified governments to move money away from risk management funding toward other programs, such as those focusing on innovation. However, by 2013, AgriStability policy adjustments made it harder for farmers to qualify for the program and paid them less money when they did.
Now producers are calling for AgriStability to pay out at pre-2013 levels and remove reference margin limits so that it is easier for producers to qualify.
Bibeau says her objective is to find consensus among the provinces to “make AgriStability more generous, easier to understand and to proceed with, and also fairer when we look at the different sectors in agriculture.”
She said she is confident governments will be able to accomplish it but admits it won’t be easy.
“I still have to finalize my work at my own level, to get the authority to make changes that I’m looking for, and it will be obviously, for all of us, a matter of the financial capacity,” she said.
While Ottawa knows there are a few levers it can play with, such as the compensation rate, payment triggers and the cap paid out — Bibeau said “we all already agree on the fact that removing the reference margin limit should be the first step.”
Doing so is considered to be the most palatable option across government, largely because it is the least expensive option. That move may appease some producer groups, but others, such as pork or cattle producers, will want more substantive changes.
For example, cow-calf producers have low eligible expenses, in part because they often produce their own feed and have low labour costs, so their margins must drop farther than other commodities before triggering payments from the program.
Bibeau maintains that “all the options are still on the table” but said all the analysis done internally and externally shows “the best first step in the right direction” is to remove the reference margin cap.
In March, Agriculture Canada officials confirmed lowering the threshold to qualify and raising the total amount that can be paid out under AgriStability were also options being considered.
It’s expected the provinces will also receive an update on the status of international trade and discuss other issues pressing the agricultural sector, such as the potential threat of African swine fever.