Keystone Agricultural Producers’ (KAP) annual membership fee of $200 could increase by $50 or 25 per cent to $250 Nov. 1 if the Manitoba government approves it.
KAP members voted unanimously for the fee hike at their advisory council meeting here July 30.
They also unanimously passed a motion in favour of increasing membership fees by five per cent effective Nov. 1, 2021 and Nov. 1, 2023, and then reassessing the policy.
“Part of the reason (for the increase) is KAP carried a deficit budget the last two fiscal years and a loss in 2018,” KAP general manager Patty Rosher told the meeting.
why it mattersKAP is Manitoba’s designated general farm organization, which under Manitoba law, allows it to collect a refundable checkoff on farm products at the point of sale. KAP’s mandate is to advocate in the interests of Manitoba farmers.
“This should result in an increase of $240,000 (in fiscal 2019-20) in membership revenue assuming the same membership levels.”
The additional money will “shore up” the deficit in KAP’s Farm Safety Program, cover higher staff costs following the filling of four vacant positions, and cover increased per diems for KAP directors (see ‘per diems’ further down).
“And if there is any money left over I will be asking for an increase in our training budget and research budget, which has been zero (increase) in the last few years,” Rosher said.
KAP’s last membership fee increase came in 2012 when it went up $50 or 33 per cent to the current $200, Rosher said.
The Manitoba Farm Products Marketing Council has to approve the fee increase, she said. If KAP presents its request to the council by the end of August or early September the council should have enough time to change the regulation governing KAP’s checkoff before KAP’s new fiscal year starts Nov. 1.
Several members, including Starbuck farmer Reg Dyck, said KAP needs to have a long-term membership strategy because as farms get bigger there are fewer farmers and therefore fewer potential members.
“That’s a reality and I think we should have a long-term strategy to help deal with reality,” he said.
KAP has been working on that, including by reaching out to farmers whose checkoff falls short of the $200 annual fee and asking them to leave their money in KAP, Rosher said.
KAP is also preparing to do a new strategic plan and membership will be part of it, she said.
Rosher is confident KAP’s membership will not decline due to a fee increase.
“Membership levels in KAP have more to do with the quality of the crop than necessarily with the increase in the fee,” she said.
For example, KAP memberships declined in 2011 and 2014 following widespread flooding.
“Also, a factor is a decreasing number of farmers in Manitoba, but if you look going back to 2001 we have seen a decreasing trend in KAP membership, but at a flatter level than the actual decrease in farmer memberships.”
Last fiscal year KAP had 4,757 members. As of June 30 it had 3,608 paid members, up from 3,307 and 3,477 at the same time in 2018 and 2017.
(Since the checkoff is collected incrementally as farmers sell products over the year, the number of members peaks at the end of its fiscal year.)
Farm safety program
In addition to the normal steady rise in operating costs, KAP’s budget has been pressured by changes in cost sharing its farm safety program, which requires KAP to contribute $600,000 over five years.
Under the current Canadian Agricultural Partnership the Manitoba government provides 50 per cent of the funding, down from 75 per cent under the Growing Forward 2 program.
If the province approves KAP’s request for a five per cent fee increase in 2021 and 2023, KAP will be able to budget better, Rosher said, adding, the rise will be similar to the average rate of inflation.
Higher per diems for KAP executive, directors and advisory council members, while doing KAP work, will cost the organization an estimated extra $18,800 a year, Rosher said.
KAP’s 2019 budget is an estimated $1.6 million, with a projected net loss of $32,375. With four months left in its 2018-19 fiscal year, KAP had spent $991,248 and had a net operating surplus of $54,483.
KAP’s board of directors did a lot of research before recommending an increase in fees and approving an increase in per diems, KAP president Bill Campbell said after members voted.
“It was not taken lightly and we acknowledge your unanimous support and we will do our best to carry on the best that we can,” he said.
The higher fees, if approved by the Manitoba government, will not be wasted, Campbell said in an interview later.
“It’s gratifying to see the acknowledgment (from advisory committee members) that we need funds,” he said. “It costs a fair bit to run this organization and to be an effective lobby group and to get things done.
“There are still some ongoing issues with participation. We need to get young farmers engaged. We are seeing farm sizes get a lot bigger. We’re providing a lot more services and validity to big farms now.”
KAP’s new per diems
After comparing remuneration for farmer-executives with other commodity groups, the Keystone Agricultural Producers’ board of directors approved a $25-a-day increase in per diems for its executives working for KAP.
“Moving those rates up actually brings us in line with other commodity groups that are out there,” KAP vice-president Jill Verwey told KAP’s advisory council meeting July 30.