Fred Steele
Thirteen years ago was the start of the first of the five-year federal-provincial deals on agriculture. The new approach to secure five-year deals has yielded benefits and has proven resilient - so long as there remains the flexibility to engage agriculture in consultations on the next generation of programming.
Up to the time of the first Agriculture Policy Framework (APF), there had been several tries at financial stabilization programs to ease and, the feds hoped, eliminate the calls for help when disaster struck. The provinces were also often asked to weigh in with financial help, with things like the Whole Farm Insurance Program. There was no consistency between provinces, so the two sides (actually many sides - the feds and 10 provinces, and later the territories) got together to try a new approach.
That first five-year plan was the Agriculture Policy Framework (APF). It introduced the Canadian Agricultural Income Stabilization Program (known widely as CAIS) which has since matured into the AgriStability Program we know today. The National Income Stabilization Account (NISA) of that early era, at one time cancelled, came back as AgriStability. Other elements were Production Insurance, Advance Payments, and Environmental Farm Plans and Food Safety Programs.
Over time, the ‘suite’ of programs was rounded out by the inclusion of matching funding for research, or “Research Clusters”, export market enhancement, and the much-maligned AgriRecovery Program.
The next two five-year deals were Growing Forward and Growing Forward 2. The AgriPrograms were developed from earlier attempts to stabilize programs. Now, everyone is thinking about the next deal - farm organizations have put forth suggestions for improvement. Governments have indicated some willingness to be flexible but are signaling, as expected, that “there will be no new money” for the next five year deal. But there will be a five-year deal.
The five-year deals provide more certainty in programming, as both grower and government live within the parameters of the APF for the five-year term. Agriculture Ministers no longer have to appeal to the treasury every time disaster strikes (although reduced AgriStability coverage could leave producers at risk and generate new calls for ad hoc funding). Also, there is an inconsistent and ad hoc feeling to AgriRecovery. Some of the programs have annual allotments, but programs like AgriStability and AgriInsure are ‘demand driven’, so government puts in whatever is required.
Prior to Growing Forward 2, there was some consultation with agriculture associations, but it is my opinion that the governments had pre-determined the outcome before talking to growers:
- AgriStability would reduce its coverage.
- Some of the money saved would be placed into other programs, especially the AgriInnovation Program, which was to assist industry to adapt new practices that in theory would reduce the draw on AgriStability.
- Overall less funding was put into agricultural programs.
The government and industry have been fortunate that there were no nation-wide disasters to increase the draw on AgriStability in the past 2 years. Another contributor to the reduced draw is lower participation, as AgriStability is ‘played out’ in terms of reduced coverage provided to sectors such as beef, which continued a multi-year depression of income, and for which AgriStability benefits evaporated as the years following BSE were followed by unfair US trade sanctions which eroded the ‘base’ upon which program benefits are determined.
Grain returns, important because of their large scale in the agriculture industry, were buoyant since the mid-term of the first Growing Forward, and there was no draw on AgriStability. Some have supposed that one of the reasons for reducing the coverage in AgriStability was because of the growing margins in grain creating a larger potential payout should grain prices collapse. The program coverage was expanding rapidly as price levels and margins increased. There are two issues for government: Treasuries might be hard-pressed to finance a collapse in grain markets and secondly, the grain growers might not be as financially vulnerable as they were before the string of good years.
What have agriculture associations proposed for the next five-year deal?
It is a work in progress, as associations consult with their members (shameless promotion: one of the key reasons that all growers band together and be members of associations is that acting collectively gives associations greater clout when proposing improvements to agricultural programs).
Here are some of the ideas being proposed by national agricultural organizations, led by the Canadian Federation of Agriculture:
- For AgriStability, change the trigger for payment from ‘a thirty percent drop’ to ‘a fifteen percent drop’, as it once was.
- For AgriInsure, increase the government contribution from 1.5% to 2%, as it once was.
- Increase coverage for new farmers (those who are in business for less than 5 years as they are more financially vulnerable).
The BCFGA, primarily through the BCAC Interior Horticultural Sector, has proposed that resources be provided for
- A national Plant Pest Response Program. This would provide resources for control and eradication during disease and invasive insect outbreaks, just as there are funds for livestock disease outbreaks.
- Put more money into EFP so on-farm projects are properly funded.
- A national approach to Integrated Pest Management (and organics) programs. The hugely positive experience with the Pest Management Centre has begun to show the benefits Integrated Pest Management, but this is only the first step to a truly world-leading approach.
- There are many other ideas circulating, such as making AgriStability based on overall industry disasters, rather than individual financial disasters. All associations welcome input of member-growers on how to improve programs.
Finally, all agriculture associations are looking forward to a meaningful engagement, with a thorough and meaningful consultation on the next five-year federal provincial agriculture deal.
Extra bonus: buzz words to watch:
“Social License” - meaning that in order not to face a tidal wave of regulation, industry must self- regulate. Program funding might be influenced by the concept.
”Public Trust” - see “Social License”.
“Adaptation” - seen by government as an alternative to stabilization. Government sees the balance between adaptation programs and financial stabilization programs as a ‘zero sum’ game - an increase in one means less of the other. Producer associations do not agree with ‘zero sum’, as they note a general reduction in program benefits, both due to better returns (recently) and reduced participation as the joy for growers participating in the programs is diminished.■
Fred Steele, President BCFGA