Ottawa is demonstrating that it prefers to lean on existing federal-provincial programs rather than create new methods for delivering assistance. That is evident in how it decided to pay $252 million in support for farmers and processors.
Half of the money will come from a pre-existing program.
The government is delivering $125 million to farmers through AgriRecovery, a federal-provincial business risk management program designed to help farmers recover from natural disasters.
Each year, about $125 million is budgeted for AgriRecovery, but it is rarely used in full. Between 2014 and 2018, an average of $6,743,200 was paid directly to farmers through it.
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The total amount will be spent this year, and it is expected more money will have to be put into AgriRecovery later to accommodate the extraordinary expenses the federal government has agreed to pay; $100 million of it has already been earmarked for a set-aside program in the pork and cattle sectors.
While critics are claiming the AgriRecovery funding isn’t “new” because it involves money that already existed in the budget, its disingenuous to ignore Ottawa’s commitment to spend the total $125 million amount, and more if needed.
Typically, 70 percent of the extraordinary costs associated with a natural disaster are eligible for AgriRecovery coverage, but now the federal government is saying farmers will be covered for 90 percent of eligible expenses.
That, of course, makes AgriRecovery more expensive for government. The federal government is committed to paying its 60 percent share of that, regardless of whether the provinces come on side.
Provinces are responsible for paying 40 percent of AgriRecovery costs, and at least one province, Saskatchewan, is concerned that covering its share will stretch limited provincial finances.
Federal Agriculture Minister Marie-Claude Bibeau is pitching the move as giving provinces “flexibility,” but it is clear she wants provinces to pay more as her department looks to tailor existing programs toward pandemic relief.
So far, she has failed to get all the provinces on board, prompting the federal government to act unilaterally in raising the eligible coverage for farmers.
By announcing it is willing to pay more, the federal government is also applying pressure on the provinces to follow suit. In Alberta, it worked: the province has announced it’s in.
But government sources admit Bibeau faces pushback from several provinces on the AgriRecovery changes, as well as changes being made or proposed for other pre-existing business risk management programs.
Bibeau admitted “all of the provinces are not at the same place” when it comes to funding AgriStability, a cost-shared program triggered when producers experience a large profit margin decline.
While five provinces have agreed to allow producers to apply for advance payments under the program of 75 percent, farmers in the other five provinces will only be able to ask for the traditional 50 percent prepayment.
Bibeau has also so far failed to convince provinces to include a lack of access to labour as an eligible claim under AgriInsurance, which is usually triggered when production losses are caused by “severe but uncontrollable hazards.”
Primarily aimed at provinces with a large horticulture industry, the federal government argues including labour shortages would insure producers against lost production should they be unable to employ enough workers for harvest.
So while the federal government would like to see more co-operation (and money) coming from the provinces, it is demonstrating a willingness to spend on existing programs, even in the absence of provincial support.
D.C. Fraser is Glacier Farm Media’s Ottawa correspondent. Reach out to him by emailing dfraser@farmmedia.com.
