Removing the reference margin limit from AgriStability would cost the Saskatchewan government about $20 million per year, agriculture minister David Marit revealed last week.
But he said doing so would improve the program.
“Yes. Phenomenal,” he said when asked if removing the reference margin limit would make a difference for farmers.
The reference margin limit was introduced in 2013 to ensure payments to farmers weren’t higher than their expenses. It was adjusted in 2017 under the Canadian Agricultural Partnership to ensure the limit was never less than 70 percent of the reference margin.
Read Also
China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
Farmers across Canada have been asking for its elimination, along with a return to an 85 percent reference margin, to make AgriStability more responsive.
Marit told the committee examining his ministry’s spending estimates for the next fiscal year that removing the reference margin limit alone would be a huge cost for a province like Saskatchewan where agriculture is a more significant industry.
Other provinces have made some changes to their portion of AgriStability spending but at lesser cost.
Marit was prepared to take a proposal for AgriStability changes to the federal-provincial-territorial ministers’ meeting scheduled for Guelph, Ont., in July but the meeting has been postponed to October.
Aside from needing his cabinet colleagues’ approval to allocate an extra $20 million to the program, he would also need the agreement of seven out of 10 provinces.
During COVID-19 agricultural meetings, Ontario put forward a proposal asking for the two changes that farmers want and for the difference to be funded 90 percent by Ottawa and 10 percent by the provinces, instead of the usual 60-40, until CAP is up for renewal.
Marit said Ottawa hasn’t responded to that request.
Agricultural Producers Association of Saskatchewan president Todd Lewis said governments have been reviewing AgriStability for years now and it’s time for Ottawa to act.
“Provinces have tried to recognize that there are issues there,” he said of the Ontario proposal.
Lewis said officials only have to look at 2018 farm income numbers that show both farm income and program payments dropped to “see the problems and design flaws.”
Lewis and Marit both said that AgriStability does pay out for some farmers but needs improvement.
“I think there’s an opportunity here if we just did some tweaking, that the private insurance could move into that place and give the farmer the opportunity to make a business decision, saying, ‘OK, I can live with what the federal government is deeming a disaster but if I can’t I have to buy up to a higher percentage and it’s going to cost me this much per acre and I’ll take that risk’,” Marit said. “I firmly believe that that is the correct way to go.”
