Farmers are watching the economic uncertainty around COVID-19 and wondering if available safety nets will catch their fall.
AgriStability is supposed to kick in when farm incomes drop, but many farmers have already kicked it to the curb because it failed to offer adequate protection and isn’t immediately responsive.
“For 3-1/2, four years now, we’ve asked for reforms to the BRM (business risk management) package,” said Jeff Nielsen, president of Grain Growers of Canada. “There’s just finger-pointing back and forth.”
By that he means between Ottawa and the provinces. Reforms cost money and none have yet been willing to commit more to the cost-shared programs.
“Someone has to take the lead and that’s what we look to Ottawa for,” Nielsen said.
GGC, the Canadian Federation of Agriculture and others have long asked that AgriStability be returned to the pre-2013 version.
At the 2012 ministerial meeting in Whitehorse, governments changed the payment trigger from 85 percent to 70 percent of historical averages, saving them between $400 and $500 million per year.
At the time, some warned this would gut AgriStability and turn it into more of a disaster-relief program than one to stabilize incomes in a downturn.
Farmers hoped they would see improvements when the Canadian Agricultural Partnership was signed for 2018 to 2023. Instead, there was minor tinkering and an ongoing review continues.
Federal Agriculture Minister Marie-Claude Bibeau said she and her provincial counterparts talk each week about how best to support farmers in the short term.
She is considering a request from AgGrowth Coalition members except for the Canadian Cattlemen’s Association, which has called for AgriRecovery, for an immediate federal injection of five percent of 2018 allowable net sales to AgriInvest as the quickest way to get money into farmers’ hands.
Bibeau said everything is on the table and the federal government is ready to move into sector-specific measures to deal with COVID-19.
In the longer term, AgriStability changes are still on her agenda, she said.
“Maybe this crisis is an opportunity to force ourselves to think out of the box and create something that will be even more efficient,” she said in an interview. “Even if there is a possibility to get an advance (on AgriStability payments) the rules are so complicated that producers hesitate.”
Provincial ministers say they are committed to a better program but they haven’t committed more money.
Peter Slade, assistant professor of agriculture and resource economics at the University of Saskatchewan and Canadian Canola Growers Association chair in agricultural policy, said when he looked at Saskatchewan’s AgriStability data, for example, it was clear that the 2013 change saved the province about $50 million each year.
“It is in some sense easy to change the program, but it is certainly not without a cost,” he said.
Slade said he believes governments are willing to listen to farmers about potential changes but want to keep the existing financial envelope. In other words, money would have to be shuffled from one program to another.
“Increasing it by a few hundred million is a tougher sell,” he said.
He suggested a revenue-based program might be simpler than one based on margins.
For now, AgriStability still pays out, as evidenced by government spending, but farm organizations want more to benefit from it.
CFA president Mary Robinson said some provinces said they won’t be able to pay for a better program but the situation is more critical than before.
“You look at the past year and how devastating it has been in particular with market upheaval and difficult weather and a bunch of transportation disruption. That kind of sets the stage for this to be even more important now because we have so much uncertainty,” she said.
She said the AgriInvest request comes with a $1 billion price tag.
“A few months ago that would have been laughable. Now, it’s ridiculously tiny of the total spending on COVID response,” she said.
Nielsen said AgriStability could be the backstop farmers need if the 85 percent trigger is reintroduced.
In addition, he said the measures to deal with COVID-19 so far have been ineffective.
“What have they given the grain sector? Nothing,” he said. “We’ve either got more debt, the ability to take on more debt or we’ve got extended debt. Is that really what we’ve asked for?
“We’ve got a grey cloud hanging over us.”