In an effort to entice either Saskatchewan or Ontario to embrace the controversial agricultural policy framework, federal agriculture minister Lyle Vanclief is considering two changes long sought by critics.
An aide to the minister said Nov. 21 that Ottawa has agreed to provincial requests that it consider adding negative margin, or operating loss, coverage to the new safety net program and allow farmers to enrol with a letter of credit from a financial institution rather than actually making a money deposit.
“Both of those are under consideration,” said Vern Greenshields, senior communications officer in Vanclief’s office.
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Greenshields said federal officials are considering how the concept of negative margins and letters of credit would fit into the business risk management programs already approved by eight provinces and being offered to Saskatchewan and Ontario.
“I don’t believe the consideration has gotten down to specific levels or dollar figures,” he said.
“But the concept is under consideration and the minister has not drawn a line in the sand on either of them. Nothing has been ruled out.”
One critic said a federal concession of a letter of credit would be a major move.
“I don’t honestly think adding negative margins to the program would mean all that much for the grains and oilseeds industry,” said Cam Dahl, executive director of Grain Growers of Canada. “Letter of credit would be significant because affordability has been a huge issue. To get full coverage, farmers would have to invest more than they have collectively in their NISA (Net Income Stabilization Account program) accounts.”
Dahl said that under Canadian Agricultural Income Stabilization Program rules, government money will not be paid out until it is triggered.
Provinces pushing for a letter of credit arrangement say it would put farmers on the same footing, providing CAISP with a promise that if money is triggered, the farmer will be good for his entry fee.
However, Dahl said a federal concession to add negative margin coverage may not be easy to implement. It would potentially raise payouts and therefore costs for the eight provinces already signed.
With a change of federal Liberal governments slated for Dec. 12, critics have suggested that holdout provinces Ontario and Saskatchewan have leverage to try to win some changes.
But Dahl said, “I don’t think you’ll see anything happen before the end of the year.”
