A committee of Ontario grains and oilseeds producers has developed a proposal for a new commodity-specific farm support program that has politicians running for cover while farmers in other provinces wonder if it could work for them.
The Ontario Grains and Oilseeds Group has developed a risk management program proposal that it says would be a patch on the Canadian Agricultural Income Stabilization program, providing money to farmers quickly when prices plus historic average yields produce an income that falls below a recent average.
Farmers would buy a level of coverage and the program would pay out when spot and futures prices indicated a need. The payment would come the year the gap was identified.
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“Ontario is really lagging behind Quebec and the United States in program value for farmers,” Mike Bakker, a farmer-consultant who worked with the design group, told a Grain Growers of Canada meeting in Ottawa last week. “The rhetoric is that everyone says they recognize the flaws of CAIS and that something needs to be done but work has to happen to pull the alternative together.”
Bakker and Ontario Soybean Growers’ Association president Greg Devries told the meeting Nov. 30 that costs to governments if their plan was accepted would be up to $400 million annually in Ontario, shared by Ottawa and Toronto.
Across the country, it would be more than $1 billion annually.
They said because of its dependence on historic margins and a year or two gap between need and payment, CAIS has not worked for the grains and oilseeds sector, which has been in steady decline. Annual low returns mean margins are squeezed and payments are not triggered for chronic need.
“The grains and oilseeds sector is falling through the cracks of CAIS,” said Devries.
Allan Ling from the Atlantic Grain Council told the meeting he liked the concept.
“CAIS has not worked, does not work and will not work,” he said. “I like what I’m hearing. I would like to see the analysis spread across Canada.”
Ontario and Ottawa have rejected the proposed plan as too expensive.
Governments also say the commodity-specific nature of the program, as well as its rejection of the average used by CAIS that removes the high and low years from the formula, would put the design at odds with World Trade Organization rules.
It also challenges the assumption of the agricultural policy framework that commodity or province-specific companion programs would be unnecessary.
In effect, the Ontario grains and oilseeds group is arguing for what would essentially be a new companion program.
Grain Growers of Canada is promoting a plan that would see Ottawa reverse course and compensate for income loss due to trade injury.
Former agriculture minister Bob Speller, running for election in his old riding of Haldimand-Norfolk, said CAIS needs to be improved and perhaps expanded.
“We need something that is market response, sector responsive and income responsive,” said Speller.
He said if re-elected, he would work to fix the flaws in existing farm support programs.
