Farmers reject AgriInvest averages data

The average balance in a Canadian AgriInvest account, excluding those in Quebec, is $28,124, according to figures from the federal government.

That, farm organizations say, is why asking farmers to draw those accounts down might not have the intended effect.

The Canadian Federation of Agriculture and others have asked for help for the sectors impacted by COVID-19. They have also asked for more detailed information about AgriInvest accounts so they know who might be in a position to draw down the balances.

Ottawa has said it wants farmers to use the $2.3 billion in AgriInvest savings before expecting further assistance. And, it says it can’t provide data for each sector.

“Without understanding the underlying data that they used to get these averages these numbers are useless,” said Chris Van Den Heuvel, CFA’s second vice-president.

“In order to get averages they need to know how many and they need to know how much in each account. Their excuse that they’re unable to provide the amount of funds in each sector, that doesn’t fly. They got the averages somehow.”

He said if there is a valid reason for not having or not wanting to release the data then Agriculture Canada should tell the industry.

“Or, they don’t want to release the data because it doesn’t fit their narrative,” he said. “Just tell us one way or the other.”

Both Van Den Heuvel and Grain Growers of Canada president Jeff Nielsen said the amounts in accounts are small on a per farm basis.

Nielsen said his seed bill was larger than the average. Fuel and fertilizer costs are typically much larger and he said having better data on the accounts would help industry understand where the federal government is coming from.

For example, knowing the age categories of account holders would present that aspect of the program and give the government and industry guidance on how AgriInvest is working.

“We’re working with them to try to make (business risk management programs) better,” he said.

Van Den Heuvel said if the bulk of the funds are in sectors that aren’t impacted by COVID-19 then forcing all farmers to withdraw the money isn’t going to help those who really need it the most.

“Twenty-eight thousand dollars is not going to come even close to help mitigate some of the pain that they’re feeling right now,” he said.

Industry has asked for a cash injection to AgriInvest as the quickest way to get money into farmers’ hands but hasn’t received a response from the government. CFA would also like any 2020 AgriInvest drawdowns to be non-taxable.

“Producers that were in a position where they would have needed to draw down on their AgriInvest accounts presumably were in a non tax-paying year anyway,” said Van Den Heuvel.

Peter Slade, an agricultural economist at the University of Saskatchewan, said using averages makes it difficult to determine how much protection the accounts provide.

“Do most cattle farms have $13,000 in accounts or do 10 percent of farmers have $130,000 and the rest have zero?” he said, referring to the data for that commodity.

“That being said, taking the averages at face value, they represent about 3.5 percent of average revenue for beef farms and about 2.5 percent of revenue for hog farms. Not much of a cushion given the movement in livestock prices.”

However, Slade questions the need for ad hoc assistance. The BRM programs are in place and are supposed to protect against losses. He said if the programs are “found wanting” then structural change should be examined.

A review of the BRM suite has been underway for some time.

Since COVID-19 struck the government has announced some additional assistance, such as the AgriRecovery program for cattle and hogs, while promising to do more.

Richard Gray, also an agriculture economist at the U of S, noted the government has offered low-cost business loans through Farm Credit Canada.

“These loans are going to be accessed before farmers tap into the AgriInvest balances,” he said.

Van Den Heuvel said he remains cautiously optimistic about the government’s promise of more help. He said measures must be announced now because farmers are making decisions now.

He referred to an Ontario farmer who mowed 450 acres of his asparagus crop because he had no market.

“We can’t wait. We need the government to take action now,” he said.

Nielsen called the situation frustrating. The industry wants to make the programs better and uses the BRM tools that it can but COVID-19 has thrown a wrench into everything.

Using the grain sector as an example, he said it could be a second wave of COVID that shuts down railways or terminals to cause transportation problems, or it could be weather or another issue.

“The world’s changed this last year and it’s nothing we can do anything about,” he said.

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