Programs alleviate farm risk

Sunday, November 7, 2010

by SUSAN MANN

Ontario’s horticultural industry leaders have developed a risk management program to help growers offset unexpected costs increases and they’re now planning to lobby governments to fund it.

It’s the fourth risk management proposal produced by a provincial commodity group since several groups began working together under the umbrella of the Ontario Agricultural Sustainability Coalition earlier this year. Grain and oilseed growers, hog and cattle producers have all developed proposals for programs and submitted them to the provincial government. The province’s sheep and veal producer organizations have yet to announce finalized plans.

In July, the provincial government backed the grain and oilseed growers’ proposal by extending its share of funding for a pilot program for one more year. To date, no other group’s proposal has received a financial commitment from either the provincial or federal governments.

Mark Wales, chair the safety net section for the Ontario Fruit and Vegetable Growers Association, says the horticultural program, called modified self-directed risk management, is much-needed, particularly since growers have been hit with several recent massive cost increases including labour, energy, fertilizer and fuel. They can’t recover these costs from the market place.

“We need a safety net program that works for everyone and meets the needs of all the different commodities within horticulture,” Wales says. “This is the one that best suits the range of types of producers that we have.”

All edible horticultural producers are eligible. Farmer contributions will be based on matching five per cent allowable net sales of eligible horticultural crops minus the seed costs. Wales says it’s the same calculation that’s used for a farmers’ contributions to their Agri-Invest account.

Farmers will be able to contribute annually and the proposal calls for matching contributions from both the federal and provincial governments as well as permitting program accounts to collect interest.

Farmers would be able to withdraw money from their accounts in years of poor crop results, sudden changes in cost inputs or price declines due to a glut of imports flooding the market. In a year when a farmer triggers a withdrawal, the proposal is for unlimited annual withdrawals up to a farmer’s account balance.

The association’s board endorsed the proposal in October. The next step is to present it to the provincial agriculture minister. Wales says they don’t know yet what the proposed program would cost governments.

Wales says farmers understand the self-directed risk management concept because Ontario used to have this type of program from the late 1990s to 2007. But governments just stopped funding it.

Susan Murray, agriculture ministry spokesperson, says it wasn’t about the provincial government starting or stopping funding for the self-directed risk management program but “what happened in 2007 was the programs changed.” Programs like Agri-Stability and Agri-Invest replaced the Canadian Agricultural Income Stabilization program.

Bette Jean Crews, president of the Ontario Federation of Agriculture, says when provincial Agriculture Minister Carol Mitchell extended the grains and oilseeds risk management program this summer it confirmed her intention to implement these programs one at a time and offered “a little glimmer of hope that she might do something just provincially but that's going to be a tough lobby."

Some people think farm leaders should ask for companion program funding to come entirely from the province, Crews says. But if that happens “never again will the federal government fund companion programs for provinces.”

Asked if the province could afford to foot the risk management programs 100 per cent, Crews says that’s not the point. “It’s about priorities. If agriculture is going to be the solution to the economy then there’s your number one priority.” BF