[UPDATED: Jan. 27, 2021] Manitoba agriculture minister Blaine Pedersen has rejected Manitoba farmers’ calls to implement the federal government’s proposal to improve AgriStability.
In a Jan. 17 letter to Pedersen obtained by the Manitoba Co-operator, 20 Manitoba farm organizations, including the Keystone Agricultural Producers (KAP), “strongly” encouraged Pedersen to “to ratify the changes to AgriStability proposed by the Government of Canada at the agriculture ministers’ meeting on November 27.”
At that meeting federal agriculture minister Marie-Claude Bibeau asked provincial and territorial governments to agree to dropping AgriStability’s reference margin limit and boosting the compensation rate when a payout is triggered to 80 per cent from 70.
If ratified quickly the changes would apply to 2020, as well this and next year.
Many farm groups say AgriStability, one of Canada’s major farm aid programs, hasn’t met most farmers’ needs since 2013 when the payout trigger changed from when margins fell below 85 per cent to 70 per cent.
“Although the proposed changes fall short of those that we have been requesting since the AgriStability program was decimated under Growing Forward 2, they are at least a step in the right direction, and we believe, represent an acceptable compromise,” KAP president stated in the letter to Pedersen. “Removing the reference margin limit will help to simplify the program and effectively lower the payment trigger for lower-cost operations. The increase in coverage from 70 per cent to 80 per cent will make the program more effective for those who suffer a significant loss.”
In a letter obtained by the Manitoba Co-operator Pedersen never says ‘no’ to the farmers’ request, but doesn’t say ‘yes’ either.
As Pedersen has stated in previous interviews his letter says the proposed changes don’t fix all of AgriStability’s shortcomings, and notes that farmers support seeking replacement programs.
“The proposed short-term changes do not address many of the outstanding issues associated with the program,” he wrote. “The elimination of the reference margin limit will increase payments to some sectors, however, will not address concerns raised by producers related to the predictability, competitiveness, and timeliness. The increase of the compensation rate from 70 per cent to 80 per cent will largely benefit program participants who already trigger payments most frequently, but does not address complexity, timeliness or predictability.
“During an engagement session with industry stakeholders, feedback was provided on a number of proposed options to replace AgriStability in 2023. Although the development of these long-term options is ongoing, industry supported the continued development of these potential alternatives, including more insurance options to cover risk.”
While that maybe so, almost every farm group in the province asked Pedersen to agree to Bibeau’s changes in the interim.
“It is vital that government and industry partners focus their efforts and resources to create real and long-lasting improvements to the BRM (Business Risk Management) that work for our producers,” Pedersen’s letter states, without explaining why that prevents interim changes to AgriStability.
Pedersen’s office didn’t reply for an interview request by deadline.
KAP said it would comment after its annual meeting Jan. 26.
To back its claims that Bibeau’s proposed changes will help producers the farm groups’ letter included some examples.
A 2,000 acre grain and oil-seed farm with a reference margin of $419,704, a program year margin of $200,240 and a reference margin of $281,394 would see an AgriStability payout of $3,791 as things are now. However, with no reference margin limit and 70 and 80 compensation, payments would be $65,487 and $74,842, respectively, based on calculations from the Agricultural Producers Association of Saskatchewan.
A farm with 600 cows, 900 forage acres and 4,000 pasture acres and reference margin of $502,524, a reference margin limit of $426,145 and a 10 per cent drop in production would get nothing from AgriStability now. However, with no reference margin limit and 80 per cent compensation that farmer would get a $34,635 payout, based on calculations from the Canadian Cattlemen’s Association.
Bibeau estimates if all jurisdictions remove the reference margin limit that alone will increase the overall spending available to farmers through AgriStability by over 30 per cent.
“And if we also increase the compensation rate it would increase by more than 50 per cent. While I believe the compensation rate to be the next best action to take I’m prepared to consider other options. But before we have this discussion on additional improvements we have to agree on removing the reference margin limit.”
In a Dec. 1 interview Pedersen said Bibeau’s plan would cost the Manitoba government more money.
“Right now Manitoba spends $150 million plus each year in terms of support for agriculture,” he said. “So it’s a substantial number. This AgriStability proposal… will cost Manitoba approximately $15 million (more) per year (and potentially even more if farmers rejoin).
“The biggest impact of course is on Manitoba, Saskatchewan and Alberta — the Prairie Provinces, the biggest agricultural producers of all our country — so there is significant challenges for us here.
“The federal government has much more ability to finance this than the provinces…
“Our real challenge with this is it doesn’t… address the key challenges of AgriStability.”
Listed below are the farm groups that signed the letter to ag-minister Pedersen:
- Dairy Farmers of Manitoba
- Keystone Agricultural Producers
- Keystone Potato Producers Association
- Manitoba Beef Producers
- Manitoba Beekeepers Association
- Manitoba Bison Association
- Manitoba Canola Growers Association
- Manitoba Chicken Producers
- Manitoba Crop Alliance
- Manitoba Egg Farmers
- Manitoba Forage and Grassland Association
- Manitoba Forage Seed Association
- Manitoba Oat Growers Association
- Manitoba Pork Council
- Manitoba Pulse and Soybean Growers
- Manitoba Seed Growers Association
- Manitoba Sheep Association
- Manitoba Turkey Producers
- Prairie Fruit Growers Association
- Vegetable Growers Association of Manitoba
*Update, Jan. 27: a link to a statement from Keystone Agricultural Producers was added
*Update, Jan. 26: a list of the farm organizations that signed the letter to Blaine Pedersen was added.