“If you don’t have a margin, how do you access funds?”
– Robert McLean, KAP
Dianne Smith was expecting a rough ride from Manitoba cattle producers over her presentation on business risk management programs. But the audience sat mostly in stony silence, offering only a few perfunctory questions.
Smith, an Agriculture and Agri-Food Canada client relations officer, was puzzled. Betty Green, a cattle producer from Fisher Branch, was not.
Livestock farmers are so disillusioned with Growing Forward, the federal-provincial farm policy framework, they feel it’s not even worth talking about, said Green. “They’ve absolutely given up.”
Skepticism wasn’t half the word for the reaction to Smith’s presentation at the Manitoba Cattle Producers Association annual meeting December 11.
As far as producers were concerned, the title of Smith’s talk – “AgriStability: How to Make it Work” – was an oxymoron.
“It doesn’t work,” Larry Clifford of Dauphin said flatly. “It’s complicated, it’s not understood, it’s not predictable and the bankers don’t accept it. It’s not fixable.”
Smith tried to explain that recent changes in inventory valuations may help producers by increasing the possibility of payments. AgriStability now uses both a price at the start of the year and the end of the year to reflect any change inventory values.
But cattle producers view such tinkering as rearranging the deck chairs on the Titanic.
Their big problem is that AgriStability, like its predecessors CAIS, CFIP and AIDA, is based on a reference margin. And producers say ever since BSE, their income has fallen so low there’s no longer a margin left on which to base a payment.
“If you don’t have a margin, how do you access funds?” asked Robert McLean, a producer from Manitou.
Cash-strapped Interlake producers, who were flooded so badly last summer they have no feed for their cattle, are particularly frustrated by what they consider empty promises.
Targeted advance payments under AgriStability are supposed to get money flowing quickly to farmers experiencing a local disaster. Smith said letters offering targeted advance payments totalling nearly $6 million went out to 682 Interlake farmers in late November. As of December 8, 92 had replied.
Green is one of the producers who received a letter. But she may not even bother responding. She might receive a payment but “a year from now they will ask for every penny back.”
That’s because, when the final paperwork for the 2008 tax year is completed, Green may not qualify for an AgriStability payment because her expenses are too low. She couldn’t apply fertilizer this summer because of too much rain. She had to hire custom labour, but it’s not an eligible expense.
Jay Fox of Eddystone said he knows one producer who also isn’t likely to qualify under AgriStability, despite owing $110,000 in feed costs. Of the flooded producers in the region, about a third may be eligible for payments.
“Producers have a really negative opinion of AgriStability when their own accountants say it’s not worth the bother of applying,” Fox said.
McLean, who is also Keystone Agricultural Producers vice-president, said KAP officials have repeatedly told federal bureaucrats in vain that AgriStability does not work because it does not respond to producers’ needs in time, even when they do qualify for payments.
“They listen but they don’t hear.”
Green said producers must assume control of their own destiny by taking steps to add value to their product. That includes age-verifying cattle and getting accredited under on-farm food safety programs.
Fox said producers in his district are already taking action by culling herds and deciding whether or not to retain heifers.
The MCPA meeting passed a resolution calling on Ottawa and the provinces to make “the necessary changes to CAIS/AgriStability to enable these programs to work for cattle producers.”
Producers also adopted a resolution demanding “workable and effective production insurance programs for cattle producers that will insure both feed sources and livestock.” [email protected]