Federal agriculture minister Marie Claude Bibeau has recently provided a funding offer to the provinces that would provide enhancements to the current AgriStability program. This was welcome news to many agricultural producers across Canada.
AgriStability has always had design flaws and was, in the opinion of many, rendered almost useless when cuts were made to the program in 2013. Agricultural groups from all commodities have been consistent in asking for improvements to the program. AgriStability needs to be more robust, predictable and bankable for it to be an effective risk management tool. It is important to recognize that the program acts as insurance. Claims are only made when there is a major drop in income at the farmgate, and no producer wants to be in a position to file a claim.
Over the last few years producers have faced many extraordinary challenges beyond our control. We have experienced trade disputes such as the Chinese canola embargo. There have been unpredictable weather patterns that caused the prolonged harvest of 2019 that stretched into the spring of 2020. We have had to deal with extensive subsidization of our competing producers in the United States. Huge subsidy payments have artificially supported the price of many of our inputs and farm equipment. Market disruption and uncertainty due to processing plant lockdowns during the COVID-19 pandemic have seriously impacted livestock and caused major revenue losses.
Farmers and ranchers have struggled to manage these risks without a credible AgriStability system in place, and the current funding model has remained stagnant. Agriculture is a shared responsibility between the federal and provincial governments, but governments have not increased funding to keep up with inflation, let alone the increasing risks producers are facing.
Agriculture is a major driver of the Canadian economy. Producers have invested billions of dollars in inputs, equipment, technology, and land improvements. This investment has created a world-leading food production system that produces billions of dollars of gross domestic product annually.
There seems to be consensus that new programming needs to be in place for the next funding agreement in 2023. A short-term investment is needed right now to provide a bridge to a better long-term program.
Agriculture has the opportunity to be one of the economic leaders as Canada recovers from the impact of COVID-19. A better funded business risk management program is needed to provide a backstop if circumstances arise that cause a major drop in farm income.
Producers need to manage risk if we want to see continued growth and expansion of the industry. It is time for governments across the country to provide increased support for this critical sector during these uncertain times. The offer that has been tabled is far from perfect, but it is the first new offer of funding into the program since 2013.
The provinces have until Dec. 18 to support the proposal, and our hope is that they do.
Todd Lewis is president of the Agricultural Producers Association of Saskatchewan, Lynn Jacobson is president of the Alberta Federation of Agriculture and Bill Campbell is president of Keystone Agricultural Producers.