Details of the federal-provincial farm aid package will be announced Feb. 24 or 25 and they will be a disappointment to farmers who have been arguing for coverage of losses in the compensation formula.
Agriculture minister Lyle Vanclief said last week the program will not cover “negative margins”, despite a final plea last Thursday from the national safety nets advisory committee that losses be covered.
“At the present time, and I do not expect this to change, negative margins are not in the criteria,” he said in a Feb. 5 interview.
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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
Either at a federal-provincial agriculture ministers’ meeting in Victoria Feb. 24 or before the Canadian Federation of Agriculture annual meeting in Regina Feb. 25, Vanclief will announce a plan that will have federal cheques flowing by June or July, once farmers complete their income tax and make their claim.
It will compensate farmers whose 1998 net income fell below 70 percent of the previous three-year average.
Ottawa will pay 60 percent of the individual claim, to a maximum of $375 million for 1998. The provinces will be responsible for the other 40 percent.
And unless Saskatchewan and Manitoba provincial governments find considerably more money to throw into the program, those two provinces will not be part of federal-provincial agreements.
Last week, Vanclief said both provinces told him “they just didn’t have the money.”
Vanclief said Ottawa will only sign agreements with provinces committed to paying 40 percent of the cost of the program.
The two prairie provinces have tried to use aid negotiations during the past two months to convince Ottawa that it should be more flexible in its funding arrangements.
Vanclief said last week the 60/40 rule will apply without exception.
“If they don’t come up with their 40 percent, we will go ahead with our 60 percent payment to producers and they can do whatever they want, but it will not be a federal-provincial agreement,” he said.
“They will have to explain to their producers why they are not treated as well as they would have been treated if they were in a province where there was full participation.”
In recent weeks, farm leaders have alleged that bureaucratic negotiators are writing program rules designed to limit compensation and perhaps reduce the total two-year cost to below the $900 million Ottawa has said it could spend.
As evidence, they cite refusal to cover negative margins, insistence on individual payment caps and a tie to the Net Income Stabilization Account program, which will reduce compensation from the aid funds.
Vanclief insisted the negotiations have been aimed at writing rules that will make the program fair and trade-rule compatible, rather than to limit the cost.
“I know there is concern that provincial governments and the federal government are trying to set criteria that won’t spend the $900 million,” said the minister. “I told the safety net committee that is not the intention. We want to spend as much of the money as is necessary to help.”
The bulk of the federal money – $525 million – is being left unspent this year. Market prices and farm incomes in 1999 will determine how much of that will be needed in year 2000 payments.
