As government and farm industry officials begin to plan for the next generation of farm income safety nets, due by 1999, several issues face them.
Is there a way to make the national program rich enough to attract farmers into the Net Income Stabilization Account program without enhancing provincial “companion” programs?
Is there a way to make the program more attractive to beginning farmers than the existing NISA, which requires that farmers have money to invest before attracting matching government funds?
Is there a way to rein in the proliferation of provincial add-on programs that challenge inter-provincial equity and trade?
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“These are the basic questions we will be looking at,” said the co-chair of a national safety nets committee.
Jack Wilkinson, president of the Canadian Federation of Agriculture, said in an interview the existing NISA formula may create too low a level of protection.
Existing rules allow a farmer to contribute up to three percent of eligible receipts each year to a NISA account in order to get matching funds from federal and provincial governments.
“If the basic program is flawed, then maybe the smart thing is to move the base up for everyone,” said Wilkinson. “This could deal with concerns raised by some of the trade implications, the inter-provincial inequity issues, with provincial governments trying to raise the base up through add-ons.”
In fact, Quebec’s Union des Producteurs Agricoles is floating a proposal that eligible contributions be raised to as much as five percent.
The UPA also is developing a proposal that could make NISA more helpful to beginning farmers. It would require the two levels of government to contribute to farmers’ NISA accounts whether or not the farmer had the money to make a contribution.
“This would mean that young farmers would not have to borrow to make their contribution,” UPA president Laurent Pellerin said in an interview.
But it would not apply only to beginning farmers. Across the board, farmers would have the choice of contributing or not. Governments would not have the choice.
For farmers and governments, the benefit of the proposal is that it would create a universal safety net program acceptable to trade rules, yet improve on and be more popular than the present program.
Farmers not interested
Governments could object that it would cost them more and put little onus on farmers to protect themselves, but Pellerin said the existing low level of support proves it is not attractive enough to many farmers.
“The government wants a coast-to-coast program but they have not figured out a way to cover all commodities,” said the UPA president. “If they want to make it universal, they will have to make some changes.”
Ironically, Quebec farmers are among the lowest users of NISA because they have provincial programs based on cost-of-production protections.
“The new income option program is not our first choice and never has been,” said Pellerin. “Our preferred choice is to build our programs on a cost-of-production model. This is the only way to have real income support, but we realize this is not possible nationally so we are suggesting changes.”
In Ottawa, Quebec’s proposals have been well received.
“Quebec is proposing some interesting alternatives that we will look at,” said federal deputy agriculture minister Frank Claydon.
