AgriStability and Ontario's RMP part ways

Tuesday, November 25, 2014

by SUSAN MANN

Starting next year, it will no longer be mandatory for Ontario farmers participating in the province’s business risk management program to sign up for AgriStability too.

Ontario Agriculture, Food and Rural Affairs Minister Jeff Leal says in a Nov. 21 letter he agrees with the Ontario Agriculture Sustainability Coalition “that the requirement to participate in the AgriStability program to enrol in RMP (risk management program) is limiting the flexibility producers need to choose the portfolio of risk management tools that best meets their individual business circumstances. To that end I support your request.”

The coalition, made up of Grain Farmers of Ontario, Beef Farmers of Ontario, Ontario Pork, Ontario Sheep Marketing Agency and the Ontario Veal Association, requested in an Oct. 16 letter the minister remove the mandatory requirement that farmers sign up for AgriStability to participate in the province’s business risk management program.

The group says in its letter it “did not come to this decision lightly. There’s nothing we want more than federal safety net programs that work.”

Bryan Bossin, Leal’s senior adviser, press and communications, says by email Agricorp has been notified “and will proceed to make the changes required to reflect this decision.”

The provincial program has two arms: an insurance type component that derives funding from the province and the premiums paid by the grain growers and beef, pork, sheep and veal farmers that use it, and a self-directed risk management component that allows the province’s fruit and vegetable growers to access special bank accounts to which they and the province contribute funds. The program is designed as a risk mitigation tool for farmers to offset the impact of events beyond their control such as market prices or changes in input costs.

AgriStability, by way of contrast, is a risk management program that uses both federal and provincial funding developed to offset farm income declines that Agricorp’s website describes as related to “production loss, increased costs or market conditions.”

A spokesperson from the federal government could not be reached for comment in time for this posting.

Henry Van Ankum, chair of the Ontario Agriculture Sustainability Coalition (OASC) and Grain Farmers of Ontario, says “Agricorp is in the process of putting together the renewal packages for the program for next year so they will be able to incorporate that change into the packages” for participants next year. Under the changes, farmers will still be able to use the federal/provincial AgriStability program if they want; they can also enrol in both programs if they choose or just one or the other. “It’s still up to each producer to evaluate the tools that are there,” Van Ankum notes.

Van Ankum says he doesn’t know how many farmers will continue signing up for AgriStability once the mandatory requirement is removed. But delegates to Grain Farmers of Ontario meetings have requested the removal of the link between Ontario business risk management and AgriStability “some time ago even prior to the cutbacks within AgriStability in 2013.”

The OASC letter says after working for about a year with the deputy agriculture minister and senior staff to review Ontario’s business risk management program “our detailed analysis, measured against clear criteria, have led OASC to conclude that the current RMP (risk management program) is far superior to any other alternatives with respect to assisting job creation, bankability and predictability.”

It also became clear the mandatory requirement for all risk management program participants to enrol in the AgriStability program “was doing more harm than good given cuts to the AgriStability program and other challenges with the way AgriStability is currently operating,” the letter says.

Van Ankum says even before the cuts to AgriStability in 2013, the program did not work well for grain farmers. But federal cuts to the program in 2013 further eroded the program’s ability “to help in the grain sector. The cutbacks have seriously impaired the way AgriStability can contribute to other types of farms as well in the province.”

OASC in its letter also notes Ontario should consider putting additional money into the provincial business risk management program when the province’s fiscal situation improves to “ensure the long-term strength of this valuable program.” The $100 million a year cap on the program “has limited RMP’s great potential.” BF