by SUSAN MANN
A coalition of agricultural groups representing non-supply managed commodities is asking all Ontario political parties to commit to raising the business risk management program cap by $75 million over three years and starting the increases as soon as possible.
The Ontario Agriculture Sustainability Coalition held a press conference today at the West Perth-area farm of Mark Brock to announce it wants the amount earmarked for the program to be raised to $175 million over three years. The current $100 million cap on the risk management program was imposed in 2012 “leaving many farmers with a major shortfall in risk management coverage,” the group says in a May 22 press release. The coalition is made up of Grain Farmers of Ontario, Ontario Pork, Ontario Veal, Ontario Sheep and Beef Farmers of Ontario.
The coalition says the total amount available for the program should be raised by $25 million a year over three years until the $175 million is reached.
Henry Van Ankum, coalition chair and also chair of Grain Farmers of Ontario, says horticultural farmers also support the request as their self-directed risk management is funded as part of the business risk management program. The self-directed risk management program operates a little differently than the risk management program “but they are part of this request as well,” he notes.
“We’re one voice with one message,” he says, noting the coalition speaks for more than 50,000 Ontario farms.
“Investing in Ontario’s risk management program is the number one priority of the non-supply managed agriculture sector in Ontario,” he says. “We need stable, predictable risk management programs to give farmers the confidence to work through volatile markets and make investments in their farms that increase local food production and grow jobs in the province.”
Van Ankum says they’re still waiting to hear “for some specifics as far as support for this initiative but we wanted to make sure during this election campaign that we got our message out there on how important RMP (risk management program) is and how at the $100 million level it’s not functioning as well as it could.” The political parties are aware of this request, he notes, as coalition representatives have been meeting with candidates, working with the government and meeting with the party leaders.
Asked which party would be most likely to support the request, Van Ankum says they haven’t seen the parties’ responses yet and they’re waiting to see them.
Gabe De Roche, spokesperson for the Ontario Liberal campaign, says by email “Ontario Liberals will maintain our strong partnership with producers.”
Liberals worked with farm leaders to implement the risk management program and “we continued to work with them to implement the redesigned program,” which features a number of innovations, such as the industry-managed premium fund that offers access to support beyond the capped amount in years when more money is needed. The inclusion of the premium fund puts more of the responsibility for decision-making in the hands of the farm groups, he adds.
Ernie Hardeman, Progressive Conservative agriculture critic and MPP for Oxford, says his party can’t commit to taking the $100 million cap off and increasing the program to $175 million over three years. “There’s a lot of challenges with the (province’s) $12.5 billion deficit.”
Hardeman says he agrees with the coalition that when the government capped the program at $100 million “they took away the two main objectives of the program, which was to be predictable and bankable.”
The Progressive Conservatives would have a ‘dedicated fund’ part to the program. “In good years when they don’t have to pay out, the government money that goes in stays in,” he says, noting that would result in more than the $100 million being available to pay out when there was a bad year. The dedicated fund “does take it in the direction of making it so they don’t have to prorate the payments” for farmers.
“I do think that, and our position is that when we’re able we need to get back to where the coverage that’s needed would be there,” he says.
Representatives for the New Democratic Party couldn’t be reached for comment.
Van Ankum says the problem with the current program’s $100 million cap is when multiple commodities all trigger payments at the same time there isn’t enough money available. The final calculations for the 2013 program were completed in the past two months and payments to farmers had to be prorated “because of the funds available. RMP payments were prorated between 40 and 50 per cent,” he says, noting that means farmers only received 40 to 50 per cent of the amount they should be getting because the total program was capped at $100 million.
“All commodities were prorated this year,” he says. BF
Comments
Former MP. Paul Steckle, always responded to these sort of requests by asking - "why should we give you more money because all you'll do is pay more for rent?"
For all his faults, Steckle was dead-accurate when it came to the adverse effects of programs like RMP, and it's too bad Brock would appear to give Steckle's experience, and observations, such short-shrift.
Stephen Thompson, Clinton ON
I'm not sure how well you read the article Stephen but we we're just the gracious host and Herny Van Ankum was speaking on behalf of OASC. You're entitled to your option but I would have to disagree with you about the equipment and land rental points you made. It's those quick from the hip comments that give government more ammunion to deter improving a program that benefits 5 commodities and the hort and fruit sector.
Mark Brock
Steckle was right, and still is right, about the basic economic principle that farmers immediately capitalize any form of "stable" government assistance right back into either rent, or capital.
For a man with only a Grade 8 education, Steckle, at least on this point, understood basic economics, and human nature, in a way that nobody at the OASC seemingly ever will.
In addition, while you are dismissive about what you claim to be "quick from the hip comments", I suggest you are just being somewhat pissy because I sunk the OASC "battleship" before it left harbor.
Finally, if anyone in agriculture had any real desire to improve RMP, instead of simply enriching it for their own benefit, they would be advocating, first and foremost, the elimination of the stipulation that RMP be an advance on the provincial portion of AgriStability.
Stephen Thompson, Clinton ON
Perhaps some accountants have a vested interest in trashing the RMP which doesn't require a lawyer and an accountant to be fill in the P1 and P2 of the useless Agristability 70 % margin program.
Stephen did you advise most of his clients not to enroll in the RMP even though some of your livestock clients have collected a bundle from RMP.
The laws of probablilty would have suggested to beef farmers to not go into RMP after year one of their program - however, thanks to things like ethanol, the fortunes of beef farmers defied probabilities, and stayed low - thereby making income coming from RMP the "least worst" of all probabilities.
So, go figure, RMP has been, in any number of cases on beef farms, somewhere around 125% of net income, meaning that one has to wonder why people stayed in beef farming at all.
In addition, many of us don't charge anything to fill in AgriStability forms because it's such a "crap-shoot" and nobody knows how much, if anything, anybody might get - therefore, to suggest a personal financial gain for any of us who do what I do, is a cheap shot, and dead-outright wrong.
Editor: Comment will be posted if resubmitted and signed.
Mr. Thompson is also well aware that sometimes (as Helen Johns has said) in negotiations with gov't you don't get everything one asks for. Sometimes, as with P1-P2 it takes years to get your point across. Sometimes, even though you don't know it, there are negotiations behind the scenes. That is just the way gov't works. Gov't, not farm orgs are ultimately is in charge of program details. To suggest otherwise is being rather pissy and does not further negotiations except to see who gets to be more pissy in the public sandbox discussion.
Of course you are correct Mr.Brock,anyone fully reading the article would have known you were just the host of the press conference.
You would think that someone with such a high education (and loves to ridicule others without it) would have the decency of actually reading the first couple paragraphs before becoming unglued.
Steckle was also often quoted saying “you can’t touch my gold plated MP pension” which he didn’t pay a premium for.
Furthermore, Stephen conveniently forgets that it was often counter argued that gold plated Federal MP pension plans and bonus MP programs with no premium attached, inflate the cost of retirement land and associated mansions, as well as, contributing to the inflated demand for other consumer goods like a Denali.
The work around to prevent the BTO of ALL the OASC commodities from inflating inputs, is to put a firm Individual cap on (Individual) RMP payments with a return of premiums over the individual cap limit. The political and public optics of a large livestock producer receiving millions of dollars in program payments does sit well with anyone. A firm individual cap would go a long way to funding the OASC increase in program dollars.
This would be the same MP who voted against the gun registry because his constits did not want it so he said , who later voted to keep it because the Liberals spent a whole bunch of money on it . That was self defeating and would have been proven if he hadn't stepped down before he would have been voted out .
Not sure what Mr. Brock says is the view of all as what is the percent of Grains and Oil seeds growers enrolled in RMP? What percent actually attend county annual meetings and vote? Gov't is like all of us on a very limited budget and has too finance that so they are in a tough position . Steckle and Stephen have it right about rents and machinery getting most of any gov't support payments , there is no easy answers.
The bigger question is how many of the 50,000 are enrolled in RMP? How many grain farmers are not in RMP and why? Farmers pay for 2 insurance programs get paid for one at 50% to boot. Looks like the support programs for farmers are actually supporting the government.
My view is thatthe linkage between RMP and Agristability is required by the government and therefore could be changed by the government if they wanted to but they want the data base created by Agristability. Therefore, should we lobby for the removal of the RMP -Agristability linkage ....absolutely ....what are the chances of getting that .....somewhat slim because Agristability is a cash cow for the government and accountants.
Agristability is the poorer neutered son of CAIS and CAIS stands for Canadian Accountants Income Subsidy.
First of all, if you read the entire article, this is a lobby effort by all of OASC commodities Pork, Sheep, Veal, Beef, G &O, plus fruit and Veg. which represents approx. 50,000 farmers.
The easy answer to funding the request would be for politicians to limit the number of million dollar payments going to individual large farmers.
The accurate answer is that 50,000 farmers are thinking with their wallets, rather than with their brains - they all know that this money is going to get capitalized into land rent, but they all think they're going to somehow be either immune to, or exempt from, it
In addition, it is naive to think that payment caps to individual farms work, or have ever worked - all these farms typically do is set up different companies to work around any caps which might be established.
I'd be a whole-lot more supportive if the groups asking for this money were to admit the real reason they're asking for what they want, by referring to RMP as the "supply management injury assistance program".
Stephen Thompson, Clinton ON
Individual program caps can be made work if the political will is present. As with P1- P2 the loopholes can be plugged with the cap on entities rule etc. The resulting savings granted by strongly enforced individual program caps could be used to fund the requested top up. It certainly doesn't help either beginning farmers or public optics to see it published that some livestock or fruit and veg farmer got $millions in program payments while others got next to nothing because of a cap on the overall program.
Please do not feed the troll
Would not hog farmers need this money to help them with all the money they were loosing for so many years ? I see and have seen more hog operations spend like drunken sailors the past three years all while crying hard times and high feed prices that were killing them .
The cash crop farmers have always needed a pork and beef injury assistance program .
Or if nothing else Equity With US Farmers .
From a previous ag leader who is now in government.
In an EXPORT market, Equity with U.S.farmers is what it is all about.
Furthermore, if no INVESTMENT in ag subsidies then every subsidy for any industry should plus MP pensions should also go!
Lets face it,Ontario agriculture has little or no voting power what so ever.We saw it in the last election when the Liberals were almost shutout in rural,agricultural ridings and yet they still managed to win.We are kidding ourselves if we think any different.
The majority of city voters support farmers but the gaps are growing,what ever funds Agricuture Ontario get now should be looked at as "pity" money
The real reason Rural Ontario shut out the Liberals. Can you spell the Bully Bill called the Green Energy Act or to be precise Bully Wind Turbines.
There is something seriously wrong with this sector if $100 million in an overall good year isn't enough. Or there is a serious problem with the program design (the numbers being fed into establishing the cost of production) that is paying out to farmers who don't have genuine need for it and leaving those who do need it short because of pro-rating.
Sure the balance shifted over the course of last year (as it always does), but I find it difficult to believe that any farmer in grains and oilseeds, beef or pork, that was using market-based tools like forward contracting and hedging actually lost money... or weren't overpaying for land or rent, or had overextended themselves expecting $8/bushel corn to last forever.
To ask for more in a province that is in the serious financial trouble, is quite frankly, disgusting. We are asking our children and grandchildren to feed the greed of the current generation. At some point, someone will realise that the net worth of farmers is averaging over $1.5 million while most people are hoping to retire with their mortgages paid and two cars fully owned and a modest pension/RRSP fund.
If this sector doesn't think carefully about these sorts of asks, there will be a growing danger of the case being made that this sort of greed is "Robin Hood in Reverse" - we are taking from the average taxpayer to support the perpetuation of a system that forgives bad business decision and bloats the paper value of farm enterprises by driving up land values. Moreover, these bloated land values making it harder for the next generation to enter the business. In a capitalist system, we need a steady rate of failure to keep the industry sharp and staying competitive.
We really need to ask ourselves - why should a portion of the tax dollars of someone earning $10.25 an hour be diverted to well-to-do landowners? Why should we be asking government to borrow money for well-off farmers that our children and grandchildren will have to repay?
The right thing for the long-term good of the industry and the province is for our political parties to reject this ask in unison.
I agree with your comments that these policies ultimately lead to inflated prices that lock out young and beginning farmers. I refer to it as generational theft. But your comments regarding robin hood are incorrect.
The only sector in agriculture that use robin hood in reverse policies is SM.
Trust me, anyone making $10.25 an hour will be getting an income tax refund-they are not taxpayers. I know I sound like a broken record, but the sooner everyone on this site realizes that less than half of the population are taxpayers at the income tax level, the less we farmers will look like inbeciles in the public eye.
Raube Beuerman
Your comment about hedging conveniently forgets the fact that the U.S. farmers we compete with (at least in grains) have the added capability of not only hedging but also purchasing 100% Revenue Insurance etc. Not sure though what premium based livestock price insurance programs are available in the U.S. ? However, in order to be competitive we should have the same tools in the toolbox. Back to the old "Level Playing Field" idea.
Question for all farmers , If you ran Government Agriculture safety net programs and seen how divided farmers are what kind of program would you put in place ? And knowing that it is adding to the future debt ? Remember it has to be fair and equitable and not put any one sector at a disadvantage in favour of another. kg kimball
A similar question to the new ag minister. Ag is the main industry in Ontario driving the economy.
Is INVESTING in Equity with U.S.-European-Quebec farmers Equitable? Furthermore, for those that don't want to pay a very stiff premium for price protection offered to the above areas of the world, then that is their free choice. The extra funding could easily come by restricting large farmers (individual caps and entity rules) of any commodity. The optics of someone being capped out at $3.6 million for the for a RMP three livestock operation is certainly not acceptable. See Agricorp Livestock RMP caps: http://www.agricorp.com/en-ca/Programs/RMP/Cattle/Pages/HowItWorks.aspx
A transparent audit of RMP especially program payments to Livestock with the $3.6 million cap limit would be a good start, as well as an audit of OMAFRA program policy methodology. The question being, is OMAFRA simply trying to let the super large corporate funded large farmers scoop up most of the money and take over Ontario? So much for small, medium farmers and beginning farmers eh?
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