POLICY Why would a farm group dedicated to farmers support a report undermining farmers?
The National Farmers Union (NFU) has a long and proud history of supporting the pillars of Canadian farm policy.
The NFU has over the years supported good public policy such as crop insurance, the Crow Rate, orderly marketing, supply management, the Canadian Wheat Board, public plant breeding, and the PFRA, which included the tree nursery and water programs.
Yet, despite this record, the NFU has somehow become part of a group called Farmers for Climate Solutions (FFCS).
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That group recently issued a report on business risk management (BRM) programs, which include AgriStability, AgriInvest, and crop insurance. This report drew from a panel of ‘experts’ that included many agriculture economists who are and have been the problem, not the solution, for improving farmers’ economic conditions.
This report described farm BRM programs as having ‘moral hazard’, so the suggested solution becomes privatizing them or ending government funding.
The NFU says they are proud of their experts and their report. The committee members included mostly economists from private organizations and universities.
The committee members are from Smart Prosperity Institute, The University of Guelph, Farm Credit Canada, Agriculture and AgriFood Canada (Agri-Food Economic Systems), and the universities of Saskatchewan and Manitoba.
At the report’s release the NFU website stated “Let’s talk Business Risk Management programs! These are essential to protect farmer livelihoods, but they are also costly for governments. As climate change continues to increase risks to farmers, these programs will become more expensive if we don’t proactively invest in climate-friendly farming. That’s why we’re calling for a change!”
It is concerning to see the NFU using this language to support the FFCS’s report. The concession to government that crop insurance is “costly for government” seriously undermines farmers ability to retain these programs.
Farmers have already lost the CWB, the Crow Rate, then the WGTA Crow benefit, and the PFRA with its environmental programs. Research facilities that did public plant breeding have been shut down, while the privatization of the seed genome is being pushed hard. If it succeeds it will burden farmers with more costs.
Given this context, the loss of crop insurance and other BRM programs would be devastating, since they are one of the few programs farmers have left.
The NFU “calling for change” that would disadvantage farmers is strange. Our current environmental problems, especially truck hauling, rail line abandonment, and port inefficiency, are the result of the so-called need for change that ultimately removed the efficient coordinated marketing and transportation of grain.
Farmers are right to be wary of groups cheerleading for changes when so far change has resulted in system-wide problems, more greenhouse gas emissions and more costs downloaded onto the farmer.
These business risk management programs have been under attack for the last 10 to 15 years. The report by these so-called experts says that government-funded crop insurance has moral hazard. But I believe that claim is simply not factual.
When farmers have an insurance claim — or successive claims — their premiums increase and their net bushel coverage per acre is reduced. There are no farmers living off crop insurance. It provides income protection in a bad crop year but will not do that over many years due to how the program is designed.
Crop insurance has its own mandate that is simple, easy to administer, and that mandate should not be tied to environmental programs.
Most farmers require the protection and coverage of crop insurance to receive an operating loan. The lack of these operating loans would make many farms unviable. Combine two or three crop disasters with no government-supported crop insurance and farmers will be forced to sell their farms.
Moreover, the recommendations contained in this report would make crop insurance a bureaucratic nightmare that would result in huge administrative costs and would be a direct intrusion into farmers managing their farms.
The report says: “we anticipate that overall enrolment in AgriInvest will decline with new cross-compliance requirements, limiting the increase in government spending.”
This clearly demonstrates that the ultimate goal of the proposals put forward by FFCS is to remove crop insurance as it stands. The claim that government-funded business risk management programs have moral hazard is the first step in undermining these programs.
NFU policy does not support privatization or eroding the basis of crop insurance, which raises the question: Why would the NFU support this through its involvement with FFCS?
Another serious question remains: Who paid for this report? Ag economists do not come cheap.
The NFU should never support policy that undermines farm programs or by stating essential farm programs are costly to government and have “moral hazard”. It is demeaning and disrespectful of the great work the NFU and NFU members have done for generations.
This is not the NFU vision I have been involved with for over 40 years.
– Kenneth Sigurdson is a longtime member of the National Farmers Union. He has made many presentations to governments and the public on numerous farm issues for the NFU.
