by SUSAN MANN
Ontario Agriculture Minister Carol Mitchell says today’s announcement of business risk management programs for provincial farmers “is the most significant, transformational, made-in-Ontario agriculture program in 25 years.”
Finance Minister Dwight Duncan told MPPs at Queen’s Park the government is implementing a permanent risk management program for grains and oilseeds plus putting in new permanent programs for cattle, hogs, sheep, veal and a self-directed risk management program for fruits and vegetables.
A total of $150 million has been earmarked in the 2011 budget for the programs. The government is working with the commodity groups to have the programs in place by June.
Mitchell says the $150 million is a preliminary estimate for the demand driven programs. If more money is needed “we will meet the demand.”
The programs are voluntary. They were developed for farmers by farmers, she says, noting it isn’t known yet how many farmers will sign up for them.
Bette Jean Crews, Ontario Federation of Agriculture president, says they also don’t know how many farmers will sign up. “I hoping that the farmers that kept asking for this will realize even if prices are going up you still have to insure.”
Don Kenny, chair of Grains Farmers of Ontario, says they need to get working on implementing their program for this year. The risk management program for grains and oilseeds was first introduced as a three-year pilot in 2007. It was extended for one year last year.
“We’re hoping that this will help entice the next generation into farming because now we have a bankable, predictable program should circumstances beyond our control make our costs fall below our production costs,” he says.
Henry Stevens, president of the Christian Farmers Federation of Ontario, says the whole farming community should be pleased. “It’s good news for Ontario’s farmers and farm families.”
Fruit and vegetable farmer Mark Wales says he hasn’t seen the budget details yet but “there’s no reason the program can’t start right away. The self-directed risk management program is a very simple program.”
The upcoming provincial election in October shouldn’t impact the implementation of the program, he says, noting the next job for commodity organizations is to get the federal government’s commitment for its share of funding.
Farmers have pitched the program as a three-way partnership with the provincial and federal governments.
Ontario Pork chair Wilma Jeffray says what led to today’s announcement was a lot of hard work and sacrifice by many farmers, farm leaders, staff and Minister Mitchell. “Everyone worked really hard to promote the program and gain support.”
Finance Minister Dwight Duncan says the 2011 budget continues his government’s support of Ontario’s economic recovery. It renews the focus on eliminating the deficit while protecting education and health care spending. The deficit for 2010-11 is projected to be $16.7 billion. That’s $3 billion lower than the forecast from a year ago.
“We have a responsible plan to eliminate the deficit while protecting schools, hospitals and economic growth,” he told the Legislature. “This requires even more reform in the way government works to ensure we get better value for money.”
Not everyone was happy with the business risk management program announcement. Sean McGivern, National Farmers Union Ontario coordinator, says independent agricultural think tank, the George Morris Centre, did a study last year showing the increase in business risk management programs year after year hasn’t lead to any increase in net farm income levels.
“We just don’t see any value in these types of programs,” he says. “As long as we continue to operate on business risk management programs that pay based on pounds per animal and bushels per acre there’s going to be no incentive for farmers to change the production systems or models they’re using.”
McGivern says they’d like to have seen the money earmarked for rural infrastructure programs and for a rural job creation strategy.
McGivern also notes its ironic Duncan says the Liberals have rebuilt Ontario’s broken power system when farmers who’ve installed solar panels to supply electricity can’t get hooked into the province’s electric grid.
Conservative agriculture critic Ernie Hardeman says while the business risk management program announcement was good, overall the budget doesn’t do anything to solve the concerns of the average family, such as ever soaring hydro costs or the HST slapped on essential products and services like heating and gas. “There’s no relief for the average family.” BF
Comments
Farmleaders are the only people excited about rpm. The low numbers of farmers who have signed up shows the truth. The persentage of sign ups is minimal compared to farmers who could have signed, If it is so good, show farmres the design mechanics of the program , show farmers in public all the COP expense lines. With out all general accepted accounting business expense lines included this Rmp will be a good public relations deal for govt but no win lose for farmers.
Farmers should ask the grain farmers of ontario GFO for a very detailed list of allowable expenses and expenses that are NOT ALLOWED!
BF likes a good show,.... let BF be the lead and publish the expense and other details!
True statements
The programs are voluntary. They were developed for farmers by farmers, she says, noting it isn’t known yet how many farmers will sign up for them.
Bette Jean Crews, Ontario Federation of Agriculture president, says they also don’t know how many farmers will sign up. “I hoping that the farmers that kept asking for this will realize even if prices are going up you still have to insure.”
Show farmers the COP cost expenses allowed
(1) The belief that a permanent RMP program will somehow entice people to start farming, is flawed. All a permanent RMP will do, is exactly what any "permanent" support program ever does, and that is get capitalized back into asset values - mainly farms, which works against anyone trying to get into farming. We've got farmland valued at stratospheric price/earnings multiples now - do we really need any more farm programs which only serve to drive the price of land even higher?
(2) Using public money to disproportionately finance the largest farms of all types, whether they be grains farms, or livestock farms, is always regressive public policy. It's nice to be on the receiving end of this largesse, but public policy of this type has a way of degenerating into hopeless quagmires. Although I don't often agree with the NFU on much of anything, this time their understanding of the macro-economic flaws of funding units of production, are dead-on accurate.
Stephen Thompson, Clinton ON
But what the govenment does not include in their "feel good" speech is the part in the budget that says:
Provincial HST Rate: @8%.
Point change in 2011 gross revenue pool. About $3 billion of revenue for every one percentage point of the Province’s HST rate.
Is that saying the federal government is going to raise the HST rate to make it appear McGuinty is off the hook? Did McGuinty sign a deal with the feds on HST rate changes that go into effect automatically?
The grain farmers have caught on to the tax grab the government calls a 'support' program.
Support for who? RMP is a advance on Agri-Stability.
That means farmers pay premiums for 2 programs but can collect only once (if that).
RMP is nothing but an income 'support' program for the government coffers.
McGuinty just allowed more sectors to pay premiums into a program that does not support farmers in any meaningful way.
Thanks for reminding us that RMP gets clawed back by AgriStability, and what's worse, RMP fees don't get refunded when that happens - thereby producing a "double-whammy". I'd completely forgotten, even though it happened to me and I wasn't happy about it when it happened.
Moreover, I'm currently out of the RMP program because I'd have been considerably out-of-pocket to have "re-upped" last fall, and given the reminder about the AgriStability clawback, plus the forfeiture of RMP premiums, I figure I'm probably far-better to stay out.
Stephen Thompson, Clinton ON
You didn't mention the crop insurance part. We had to sign up for production insurance as part of RMP.
Insurance payouts were part of the AgriStability calculations.
We pay for 3 programs but payouts are calculated as if it one program.
Agricorp is collecting a pile of fees for really one program. How many insurance companies could get away with that kind of treatment to their customers?
If the new rmp is truly a program designed by farmers for farmers, then I agree with the other comments about full disclosure of the template for determining the COP. I would challenge every commodity group to develop a spreadsheet that would link Agriinvest, Agristability, and the new RMP and allow their producers to input their own data. Only then can producers make informed decisions about their participation in these programs. It is the responsibility of all commodity boards to provide their clients with information to improve the decision making process for their producers. I would argue that the easy part has been done, the political process, convincing a party that is behind in the polls in an election year to support agriculture. Producers now need full disclosure as to how the program will function, and they alone will then determine it's future success. I'm tired of leaders telling me what they believe is good for my business, give me the details of what you have negotiated on my behalf, and I'll make that determination myself.
Phil Anwender
If history repeats itself,...in 1 to 4 years it will show & predict that Rmp has been of little use to Ontario grain farmers, a lot of money spent by farmers who enroll. Very expensive insurance compared to the USA style of USA farmer support. Farm organizations nagged by Ontario farmers will lobby the govt to improve the program , as key items and flaws were left in the original 2007 program. These flaws were intentional left in by the program farmer designers in order to make the program acceptable and affordable to government projected models. It will take many years to get the flaws removed, probably only by election promises. The RMP COP program will lag behind true cop and United States of America farm programs will be far superior giving USA farmers a better chance and safe guard.
The Canadian federal Government will only give their financial support when their RMP program modeling predicts and concludes their most likely exposed yearly budgeted payout. The RMP program will have to fit the budgeted model, the results will BE MOST LIKELY be the same as passed govt programs, PLANNED MODELED INFERIOR PROGRAMS .
The averaged aged farmer of 60 will have a net result of very little while the young farmers will have to wait years for RMP program improvements and the high premium cost of enrolment .
Farmers who wonder why we don't have better ag policy in this country should only read all the negative comments about this RMP announcement to know why.
Politicians who read this must think farmers are a bunch of ungrateful so and sos. The Liberals could have bought a lot more votes if they had promised to spend the RMP money in cities.
Farmer numbers are so low, if we did all vote one way, would it make a difference in a general election? Hell no!
Liberals also know that famers mostly vote PC and some Liberal MPPs still resent the tractor demonstrations that seemed more AGAINST Liberals than FOR farmers.
RMP is the right thing to do. Probably won't buy many votes. But it is another good policy that will add to the legacy of some retiring Liberal MPPs.
By the way a lot of congrats should go to the farm organizations for getting their ducks in a row and getting this done. But It wouldn't have happened unless all the ducks were in a row. So the rural caucus as well as the Premier, Finance Minister and Agriculture Minister need to be thanked and congratulated too.
Question: If the Liberals don't get enough bang for their buck from this announcement, does anyone expect a good news announcement for farmers will ever be in any party's future election platform?
RMP could be a good program, but it's not now, and won't be, as long as RMP benefits continue to be clawed back by AgriStability, and as long as RMP premiums aren't refunded when that clawback happens.
Farm organizations have known for a long time that RMP is poorly designed, yet just like during the seven years we endured the P2/P2 inventory pricing scheme in AIDA/OWFRP, they said, and did, absolutely NOTHING, thereby serving their memberships very-poorly.
Instead of congratulating farm organizations for their role in expanding, and extending, the RMP program, they deserve to be scolded for not first dealing with the grotesque design problems inherent in the original model.
Stephen Thompson Clinton ON
Is it worthwhile for a small grain farm (400 acres) to participate in this program. I am too busy working off the farm to have time to read the data or information.
There's almost no chance of a big payout on RMP, because the more you get, the bigger the chance you'll also qualify for AgriStability only to see your RMP benefit get clawed back by the Provincial portion of AgriStability - therefore, RMP, by design, means relatively-big premiums and relatively-small payouts, with a good chance of seeing your RMP premium become completely worthless because of the clawback. I believe this is the reason why close to 50% of the grains farmers who enrolled in RMP in 2007 (if my understanding is correct) had dropped out by 2010 - I was one of them, and for that exact reason. Stephen Thompson, Clinton ON
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