Three Manitobans hope the federal government will adopt their safety net proposal to better protect farmers against times of depressed commodity prices.
Les Jacobson, Allan Chambers and Bob Hopley have developed what they call the Revenue Stabilization Program as an alternative to the much maligned Agricultural Income Disaster Assistance program.
Jacobson, a producer from Arborg, Man., said the Revenue Stabilization Program would be less complex than AIDA and less costly to administer.
It would also get payments into farmers’ hands faster than AIDA has done in the past, he said.
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“What they’re hearing from the country is AIDA really hasn’t worked. Right now, they’re still dealing with appeals from 1998.”
The Revenue Stabilization Program was one of five proposals presented to the national safety net advisory committee when it met in Winnipeg earlier this month.
The advisory committee was intrigued by the ideas in the Revenue Stabilization Program, said Roger Eyvindson, Agriculture Canada’s director of policy development.
The committee will review the program, along with the other proposals, to learn whether it would be effective, trade neutral, easy to understand and cheap to administer.
Keystone Agricultural Producers this month endorsed the Revenue Stabilization Program in principle, partly because of its simplicity.
“It’s more understandable than AIDA and that makes it attractive to the membership,” said KAP president Don Dewar, who also is a member of the national safety net advisory committee. The program is geared to helping producers manage gross revenue declines caused by dwindling market prices.
Under the program, a farm’s gross income for the current year would be compared to its historic gross income. The historic gross income would be calculated using five-year Olympic average prices (with the option of dropping two of those years) and the current year’s commodity sales.
In years of above average gross income, farmers would have the option of depositing up to 20 percent of the income gain to a revenue stabilization account. The deposit would be tax deductible in the fiscal year it was calculated.
In years of below average gross income, producers would be required to withdraw 30 percent of the calculated income loss from the account. The withdrawal would be taxable income, also in the fiscal year for which it was calculated.
Governments would pay a percentage of the income loss. That percentage would be decided by Ottawa and the provinces if they adopt the program.
Information needed to administer the program would be drawn from Net Income Stabilization Account data.
The Revenue Stabilization Account program was designed as a whole-farm program to encompass all commodities where reliable price data is available.
“That’s something that KAP has been looking for, something that would address all commodities,” Dewar said.
A shortfall of the program, he said, is that it does not adjust for increases in input costs.
