TORONTO – Canada’s agriculture ministers this week reached agreement on the outline of the country’s next generation of farm income safety nets.
However, the picture remains a bit fuzzy.
Some program details still must be worked out and this winter and spring, finance ministers will add another piece to the puzzle by telling farmers how much money will be available to stabilize farm incomes.
“We began believing there would be $850 million in federal financing available,” an official said last week while briefing reporters about the ministers’ agreement. “We now don’t know how much there will be but it will be less, that is the assumption.”
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federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
In the new program, the provinces already have limited their contributions to a bit more than half the federal contributions, although they also left themselves room for some provincial programs.
Still, federal minister Ralph Goodale was enthusiastic.
“There are a variety of details to be arrived at but we think we are well down the road toward final solutions on safety nets,” he told a Dec. 19 news conference after a day-long ministers’ meeting.
The core of the new system will be in place for the 1995 tax year, he said.
The core, an enriched and expanded Net Income Stabilization Account program, will be funded half by farmers and half by governments. Based on eligible sales, contributions will be three percent from the farmer, two percent from Ottawa and one percent from provinces
Officials said it is expected those contributions would accumulate close to $800 million annually in farmer NISA accounts. It will be available to all farmers.
The second level is crop insurance.
The third level would be provincial “companion programs”, also funded by Ottawa and the provinces at a 60/40 ratio. They could be commodity specific or generally available but would be expected not to encourage production so they would not risk trade retaliation.
Settling the rules for these “companion programs” will be one of the contentious issues to be worked out in the months ahead.
Saskatchewan agriculture minister Darrel Cunningham said the main impediment now to provinces “cheating” with rich provincial incentives is the lack of money. “I suppose that could change in the future with the richer provinces, and we need rules. That will be a challenge.”
