Manitoba Agriculture Minister Blaine Pedersen has thrown cold water on the reforms Canadian farmers have sought for years to improve AgriStability.
“We are not going there any time soon just because of the cost implications for the Prairie provinces,” he said in an interview June 11.
Asked if Manitoba farmers should stop lobbying for the changes, Pedersen replied: “This will be what the discussions will be over the next couple of years (as a new federal-provincial agricultural agreement is developed). It will continue to ramp up and we have to look at all the options and we’re asking for farmers to participate in this too and be open to options here too.”
It’s time for the Manitoba and federal governments to be candid, Keystone Agricultural Producers (KAP) president Bill Campbell said in response.
“So if you’re (government) not going to support us just let us know,” Campbell said in an interview June 11.
“If you’re not willing to invest like the Americans have, just let the people know then we can make our business decisions and exit and liquidate and find different jobs…”
To be fair, Pedersen didn’t rule out continuing existing farm supports or improving them. However, he did say restoring AgriStability’s payout trigger to an 85 per cent instead of the current 70, and eliminating the reference margin limit, would cost Manitoba, Saskatchewan and Alberta governments millions of dollars more.
Pedersen has been critical of AgriStability in the past, describing it as “a broken wheel,” in a March 6 interview, noting it doesn’t work well for cattle producers, and is complex and unpredictable.
Why it matters: Soon after the Harper Conservative government reduced AgriStability support in 2012, Canadian farmers started pushing to restore it, arguing the program doesn’t provide the income stability farmers need.
“Right now our preliminary numbers for Manitoba if we were to remove the RML (reference margin limit) and go to 85 per cent we would go from costing the province — the provincial share — from $19 million to about $35 million,” Pedersen said. “So you’re just about doubling it. And those numbers are based on today’s participation rates (in AgriStability). If you change this program — we’ve talked before that it doesn’t work for the cattle — there would be much higher participation… we have no idea of how much more participation and therefore higher costs. What you’re doing is moving from a disaster program to a support program. So, yes, we have concerns about that. And at the same time… there is $330 million sitting in AgriInvest accounts right now in Manitoba.”
Under AgriInvest farmers can annually deposit up to 100 per cent of allowable net sales, with the first one per cent matched by governments up to $10,000 a year. Farmers can use the money when they fall on tough times.
As farmers ask for government money, both levels of government have said farmers should access their AgriInvest funds.
In a previous interview Campbell said the farmers who need money now have already spent their AgriInvest cash.
Canada’s agriculture ministers and their staff have been looking at how to improve business risk management programs for a couple of years, but haven’t introduced any significant improvements, Campbell said.
Changes in the middle of the current Canadian Agricultural Partnership agreement require unanimous agreement among ministers, Pedersen said.
“That’s not likely to happen,” he said. “I know that Saskatchewan says if we went to removing the RML and (the) 85 per cent (payout trigger), Saskatchewan’s cost would increase by $60 million. So the provinces with the majority of business risk management (liability) this is a huge cost to the Prairies.”
Farm groups have been mostly pressuring Ottawa to fix AgriStability, but it’s only part of the equation.
“Of course we want to improve the business risk management program,” federal Agriculture Minister Marie-Claude Bibeau told reporters during a video conference June 9. “These programs — the budget and rules have been changed significantly by the previous government and now we need to build a new consensus with all the provinces with them contributing at their level as well. It’s not easy to get all the provinces at the same level and us as well finding a new consensus. So what I am saying is I understand these programs are not at a level that producers would want them to be. There are gaps and we are trying to fill these gaps through ad hoc support as well and there will be more. We’re still working with the industry to identify the sectors that are most in need. But still these programs are working at a certain level. On an average year it could represent up to an average of $1.6 billion. It could be double if farmers ask for that because of the situation they are facing because these programs are responding to the demand… I really encourage them to go through, even if it is a bit complicated — money is there and we are working on additional ad hoc programs to support some sectors where warranted.”
[AUDIO] Federal Agriculture Minister Marie-Claude Bibeau on improving the business ag risk management program.
Bibeau said agriculture ministers talk weekly about improving farm programs.
“We are moving forward in the sense that we are putting some options on the table discussing at what level provinces would go… so trying to find a consensus on how support can support the farmers,” she said.
Asked if reforms would be announced when ministers meet in October, Bibeau said:
“I can’t promise any deadline, but this is a top priority.”
Campbell said KAP has lobbied the Manitoba government “behind closed doors” to support changes to AgriStability.
“As we see things evolving it’s concerning,” he said.
Despite the unlikeliness that AgriStability will change soon, KAP hasn’t given up asking.
“I understand that money is tight, but it’s an investment in the industry,” Campbell said. “It needs to be viewed that way.”
Under a better-functioning AgriStability program, only farmers with a demonstrated financial need would get aid, he said. And when farmers do make money they will pay tax and bolster Canada’s economy.
“There will always be hamburger (in Canada), but will it be Brazilian hamburger? Some of the plant-based proteins are from China,” Campbell said. “Now is that the road consumers want to go down? It’s their choice.”
Canada has already seen the decline of farmers in hog production, he said.
“There’s essentially no independents left,” Campbell said. “HyLife and Maple Leaf can lose money raising hogs because they’re making money making bacon. Is that the model we want? I don’t know.
“We do not have farmer control of those particular industries anymore.”