THE federal government is stubbornly pushing for farm program money to
be distributed through Net Income Stabilization Accounts. The
bureaucrats refuse to listen to farm groups, provincial politicians and
their own analysts who have repeatedly warned against that idea.
Linking NISA accounts with farm funding in the manner proposed is
likely to result in unfair distribution and hardship by those who need
assistance the most.
Agriculture minister Lyle Vanclief has repeatedly admonished farmers
for not using their NISA accounts while expecting to benefit from other
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farm programs.
The government has several proposals for distribution of this latest
farm program. Among them is a plan to deposit into a farmer’s NISA
account $6,000 for the first $100,000 of eligible net sales. Above
that amount, the aid would drop to as low as $1,000 for each additional
$100,000 in net eligible sales.
Another proposal is that farmers with full NISA accounts would not
receive any of the $600 million in so-called bridge funding announced
earlier this year.
Simply put, that money should not be administered through NISA
accounts. Producers should not be punished for retaining money in NISA
accounts, particularly when the trigger mechanisms can be unworkable
and the other savings options less attractive. Nor is it fair to favour
small farmers over larger ones when it comes to distribution.
The government accuses farmers of using NISA and its favourable
three-percent interest premium as a savings account for retirement.
But a 1999 Angus Reid survey suggests many think otherwise.
Asked why they didn’t withdraw money, a third of farmers surveyed said
they didn’t need it, 26 percent didn’t trigger the withdrawals, 19
percent were saving the money for retirement, 15 percent said their
balance wasn’t high enough to help, and 11 percent said they thought
they’d need the money more in the future.
True, the need has grown and eligible farmers should use their NISA
accounts to help manage risk.
A government commissioned safety net review noted aggregate income
measures can mask the performance of farmers of “not only provincial
and commodity sectors, but of the individual farmers of which the
sector is comprised.”
Also, while various safety net programs overlap, “linking programs with
different purposes/objectives, and which function in a variety of
fashions, are virtually impossible to (align) in a seamless manner.”
If the federal government ignores these warnings and plows ahead, there
will be greater inequity in payments to farmers, and those who have
tried to be fiscally responsible with NISA account management and other
safety net tools will be penalized.
