The Canadian Agricultural Income Stabilization program may be the program Saskatchewan farmers love to hate, but it has sent considerably more money into that province than any other.
According to figures presented to the House of Commons agriculture committee last week, almost 31 percent of CAIS spending has gone into Saskatchewan,
Saskatchewan producers have received $1.086 billion out of $3.529 billion sent out since 2003, with another $300 million projected by the end of the 2005 payment period.
The next closest beneficiary was Alberta with 22.4 percent and $791 million received.
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More is on the way as grain and oilseed producers stand to receive the biggest share of the almost $900 million budgeted to be sent to CAIS clients by the end of the year.
The $900 million is meant to compensate for a change in how inventory was valued during the 2003, 2004 and 2005 program years, according to Agriculture Canada official Danny Foster.
“CAIS has sent out a lot of money, a lot of money,” the director general of business risk management programs for the department told MPs.
With a prediction that payments for the 2005 program year will reach $1.6 billion excluding the retroactive inventory payments, he said CAIS is projected to pay out $4.5 billion in its first three years. When it was launched in 2003, the federal projection was that it would cost Ottawa $5.5 billion by 2008, over five years.
Still, Foster said the government recognizes there are sharp producer criticisms of the program and provincial unease about the affordability of their 40 percent share of an ever-growing bill.
This week in Calgary, federal and provincial ministers meet to try to agree on program changes. They will also discuss a new stand-alone disaster program for the final two years of the current agricultural policy framework.
Foster said farmer proposals still are “on the table” for discussion. Those proposals include a Canadian Federation of Agriculture campaign to reinstate federal cost-sharing for provincial companion programs and to resurrect the farmer-popular Net Income Stabilization Account program as the new top tier of a redesigned CAIS.
Meanwhile, changes are coming to the program.
Beginning in the 2007 program year, the historic margin calculation will be based on accrual accounting rather than a choice between accrual or cash-basis accounting.
Foster said this should increase average CAIS margins and therefore farmer eligibility for payments. Liberal agriculture critic Wayne Easter suggested the opposite could be true and farmers could find margins and therefore payment eligibility even slimmer.
Foster also said the “vast majority” of payments under the government’s CAIS inventory payment will go to grain and oilseed producers.
The second major beneficiary of the $900 million program will be the cattle sector that was battered during the 2003-05 reference period with BSE and collapsing inventory values.
“The vast majority, 80 percent, will go to those two sectors,” Foster told MPs.
The details on CAIS payments surprised some who imagined the collapse of cattle markets, related to BSE, would make the cattle industry the main beneficiary for the inventory payment change.
The federal government has promised that most of the CAIS inventory recalculation money will be sent to farmers by the end of the year.
