Feds make counter proposal on possible BRM changes

Farm groups say they support a counter proposal on business risk management reform that federal agriculture minister Marie-Claude Bibeau made to the provinces at last week’s ministerial meeting.

However, they were also disappointed that no consensus was reached during the Nov. 27 federal-provincial-territorial meeting.

Bibeau’s proposal includes increasing the compensation rate offered under the AgriStability program to 80 from 70 percent, removing the reference margin limit and maintaining the current 60-40 cost-sharing arrangement with the provinces.

She said removing reference margins will increase funding to farmers by more than 30 percent and increasing the compensation rate would raise funding to farmers by more than 50 percent.

“While I believe the compensation rate is the best action to take, I’m prepared to consider other options,” Bibeau said.

“But before we have this discussion on additional improvements, we have to agree on removing the reference margin limit.”

The Canadian Federation of Agriculture called it a concrete proposal to improve AgriStability.

“CFA is very supportive of the proposed increased support put forth by minister Bibeau,” president Mary Robinson said in a statement.

“While these proposals are not exactly what we were seeking, they are a very positive step forward for the business environment of Canadian agriculture.”

The Canadian Pork Council also supported Bibeau’s proposal but expressed disappointment that no decision was made at the meeting to act on it.

“Pork producers are calling on premiers and their agriculture ministers to accept minister Bibeau’s proposal to fix AgriStability, including increasing the payment rate to 80 percent,” council chair Rick Bergmann said in a statement.

“Provincial governments will fail most farmers if they choose not to fund fixing AgriStability when they are spending $1 billion on crop insurance.”

Ontario agriculture minister Ernie Hardemann said the meeting was the first time Bibeau had offered a counter proposal to the one made earlier this year by the provinces, which would have seen funding levels move from a 60-40 split to one where the feds would pay for 90 percent of BRM costs.

“To put it in perspective, this was the first time we were able to send all the provinces back home with a concrete proposal. We’ve talked about hypotheticals, we’ve talked about changes some may like and some may not, but this is the first opportunity we’ve had where the federal government has laid the cards on the table and said, ‘this is my hand, do you want to play?’ ” he said.

“We need to provide the opportunity for everybody to consider that, to look over that, to find what the impact would be to their producers and to their treasury.”

However, Saskatchewan agriculture minister David Marit said he was disappointed that Bibeau didn’t put an offer on the table until late in the meeting and that Ottawa essentially didn’t budge on the current 60-40 funding split.

The provinces have about three weeks to make their decisions, he said, and his officials are now evaluating the financial impact.

The prairie provinces have said they will be hard-pressed to come up with the money to pay for the changes, given the size of their agriculture sectors and their populations, and had hoped the federal government would pay more for the three years until a new agreement is negotiated.

Marit also said he didn’t see how changes could be implemented retroactively and still be fair because more producers might have signed up if they had known the changes were coming.

“If this was what she was going to do, why didn’t she do it a long time ago?” he said.

Bibeau rejected an earlier 90-10 funding split but hadn’t come back with anything else until the afternoon of the Nov. 27 meeting.

“There was no heads up,” Marit said, adding none of the provinces could say yes or no right away because all the ministers have to look at their budgets for the next three years.

The retroactive change also impacts budgets that have already been announced, he said.

Changing the payment trigger from 70 to 80 percent will mean a 14 percent hit to the Saskatchewan budget. Removing the reference margin limit will cost about $20 million a year.

Manitoba agriculture minister Blaine Pedersen was not available for comment by The Western Producer’s press deadline Nov. 30, but in June he had cast doubt on the prospect of reforms.

“We are not going there any time soon just because of the cost implications for the prairie provinces,” he told the Manitoba Co-operator.

At the heart of the issue is the amount of money being made available to farmers applying to AgriStability and the threshold that triggers payments.

The program is designed to support farmers who experience large declines in income, but lobby groups have suggested the required losses that trigger payments are too high and the compensation received is too low.

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