The Ontario Liberal government last week announced $110 million in new agriculture program funding for the province. Most of it will flow to farmers eligible for retroactive payments because of a change in the way inventory is valued under CAIS for the 2003-05 program years.
Ottawa announced the retroactive change in the rules for the inventory valuation under the Canadian Agricultural Income Stabilization program earlier this year and the cost of retroactive payments is officially a federal responsibility. For 2006 and 2007, Ottawa and the provinces will split the cost of the new inventory value calculation 60-40 under the CAIS cost-sharing formula.
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Federal agriculture minister Chuck Strahl has said $900 million is available for retroactive payments, although the government concedes it may cover just half of the cost of the recalculation. The federal money will be pro-rated to accommodate the limited cash available.
Last week, Ontario became the first province to voluntarily pony up what it called its 40 percent contribution to add to what Ottawa will spend in the province.
At an international plowing match held near Peterborough, Ont., on Sept. 19, Ontario premier Dalton McGuinty also announced $4 million to help the province’s beef industry develop markets, $10 million to fund a self directed risk management program used by the province’s fruit and vegetable sector and $75 million for rural infrastructure.
“Farmers are the backbone of our rural communities and they’ve helped build a world-class agri-food sector in Ontario,” McGuinty said in the announcement.
“We want to continue to do our part to support growth and innovation in the agri-food industry to make sure our farmers and their families find success.”
The announcement of Ontario’s voluntary contribution to the CAIS retroactive payment program could put pressure on other provinces to make their own top-up announcements.
It immediately won support from major Ontario farm leaders and ridicule from the provincial Conservative opposition.
Ontario Federation of Agriculture president Ron Bonnett said his organization was grateful for the provincial support even as he pledged to continue to work through the Canadian Federation of Agriculture for long-term programs that will help make Ontario farmers competitive with their American competitors.
Cattle sector leaders also praised the announcement.
Because the CAIS inventory evaluation change will provide retroactive help to cattle producers whose herd values collapsed in 2003 after BSE was discovered in an Alberta herd, the Ontario Cattlemen’s Association was enthusiastic.
OCA president Ian McKillop said in a statement that cattle producers will receive up to $29 million of the money to compensate for the fact that CAIS inventory valuation rules did not properly account for the 2003 collapse of herd values.
Strahl said the federal part of the retroactive CAIS payments will start this autumn.
Last week in the House of Commons he promised “$2 billion will come into farmers’ hands between now and the end of the year.”
