Farmers have been dropping out of government Business Risk Management programs because they’ve lost confidence they will provide the support they need, the Canadian Federation of Agriculture says.
The CFA has conducted research that finds farmer participation in the overall suite of programs has dropped from 119,121 producers in 2007 to 73,607 in 2013. The 2014 and 2015 numbers aren’t complete.
“The decline will be worse in 2015,” Scott Ross, the CFA’s director of business risk management and farm policy, said in an interview.
“Our concern is that people are dropping out because the program lacks credibility.” When funds are available, they are too often inadequate to the financial challenge facing farmers.
Participation in AgriStability, which shores up incomes in periods of low market prices, dropped from 57 per cent in 2007 to 42 per cent in 2012 and has continued to fall since. AgriInvest and AgriRecovery have seen similar drops.
The CFA is preparing proposals to present to federal and provincial officials as part of the negotiations to start this year on Growing Forward 3 to replace the expiring GF2 program.
The CFA proposals envisage AgriInvest as a strategic investment fund that farmers and governments would contribute with annual contribution limits of $100,000. Farmers could make tax-free withdrawals from it in poor years.
In recent months, Ross has been making presentations on the issue to the provincial organizations that make up much of CFA’s membership. He says it’s vital for farm groups to present a united front on changes to the support programs at the start of talks before government officials start making decisions that become difficult to alter.
CFA has assembled a committee of producers from across Canada and from all commodities to initiate the discussion.
The federation is also crafting a new policy on what should be the key features of GF3. It hopes to gain the support of other farm organizations for its proposals.
With climate change expected to impair future farm production, it’s important to make sure AgriRecovery can cover multi-year disaster costs, the CFA briefing document says. “Climate change will bring more extreme weather events and AgriRecovery is not designed for long-term problems,” Ross noted.
The next iteration of BRM programs needs to provide additional assistance to beginning farmers, who face the greatest expense burden, CFA says.
As well, it needs to change rules that reduce the support for diversified farms producing a variety of commodities compared to a farm that produces fewer. “Diversified farms, producing and marketing non-supply-managed commodities, have been found to more likely cease AgriStability program participation compared to more specialized non-supply-managed farms.
“The decline in AgriStability participation, on the part of diversified farms, is troubling. Inadequate program coverage may lead industry to call for more commodity-specific programming. From a trade dispute potential perspective, whole-farm programming is preferred over commodity-specific programming,” the CFA document says.