Farm program cuts are coming but there are no specifics

by BETTER FARMING STAFF

Ontario’s agriculture minister and commodity leaders are keeping the details of proposed changes to national business risk management (BRM) programs under their hats until after next week’s federal, provincial and territorial agriculture ministers meeting in Whitehorse.

But those who attended a Tuesday information session with Agriculture Minister Ted McMeekin in Toronto confirm that there’s more than one proposal on the table on how to cut costs from the next round of Growing Forward federal-provincial agriculture policy framework programming. The five-year policy framework takes effect in 2013.

One of those proposals takes aim at AgriStability. Currently, AgriStability releases support when a whole farm’s program margin (determined by subtracting eligible expenses from eligible income) drops below 85 per cent of its reference margin. Dropping the program trigger to 70 per cent of the reference margin is what’s being proposed. The program accounts for 32 per cent of the nearly $10 billion that Growing Forward has paid out in business risk management support since 2007.

Another proposal is to change the contribution proportions in AgriInvest, intended to handle smaller drops in farm income. Currently, government matches a producer’s deposit of up to one per cent of eligible annual net sales into their AgriInvest account. The program accounts for 18 per cent of Growing Forward’s business risk spending to date.

McMeekin says there is also a “hybrid model” spearheaded by British Columbia and “there is some good discussion going on around that - designed to mitigate some of the negative impacts of what we might do. There are of course the non-BRM side of the federal provincial programs as well having to do with innovation and working towards productivity enhancements, so there will be some discussion at Whitehorse on that.”

McMeekin did not elaborate on the B.C. proposal or say where Ontario plans to throw its support or what ideas the province will offer.  “It would be probably inappropriate for me to prejudice discussions that the ag ministers have said they want to have together,” he says.  “The B.C. proposal - there’s likely to be hybrids off of that as well - is yet to be determined and/or discussed. So we don’t want to cast our lot entirely with any proposal; we have an obligation to share with our colleagues and our federal minister what we’re hearing from our people.”

He did note that, after the Parti Quebecois ousted the Liberals in Quebec’s provincial election this week, it’s doubtful anyone from Quebec will attend the meeting. The lack of Quebec representation won’t negatively affect Ontario’s negotiating power, he says. “We have worked hard at building relationships across the country.”  

Mark Brock, a Grain Farmers of Ontario board director who attended the meeting, says McMeekin asked attendees to maintain confidentiality about proposal details until after the Whitehorse meeting.

“We all know that cuts are coming,” he says. “I would say there’s no surprises.” He says Ontario’s commodity groups have asked for the ministers to consider taking “a little bit from everywhere, not just one deep cut in one spot.”

He says a commitment remains to maintaining agriculture business risk management programming. “We need to ensure that these programs are viable and effective in what they’re trying to accomplish or there won’t be much producer uptake.”

Mark Wales, president of the Ontario Federation of Agriculture, attended the meeting and says his organization recognizes that the federal government is “driving the agenda towards cuts. No one’s happy about that. Fundamentally, cutting the programs is going to affect individual farmers in years ahead.”

He called the proposed cut to AgriStability “probably the biggest part of the cuts that are likely to be made next week.”

In a recent OFA commentary, Wales pointed out that cuts to AgriStability would put a disproportionate amount of the risk involved in food production on farm families, which ran counter to the program’s original intention. It would also result in “overshooting” the government’s goal for reducing agricultural spending because farmers would be less likely to enrol if they felt the program could no longer offer adequate risk protection. Such cuts would also “increase the pressure on governments to distribute one-time assistance to producers facing sector-wide or regional challenges,” he wrote.  

That said, Wales points out some funds will be reinvested in innovation and some of the discussion during Tuesday’s meeting focused on what commodity groups would like to see. There’s flexibility in the policy framework for provinces to customize such programming, he says.  

Amy Cronin, chair of Ontario Pork, says if cuts are going to happen, “let’s make sure that the cuts don’t affect one sector of agriculture more so than other sectors.”  Ontario Pork is willing to work with the province “to make sure that the programs that farmers need in the future are there and if they’re not developed now, we really want to have input into the development of them.”

She notes that her organization was never invited to any federal consultations about the new policy framework. McMeekin’s meeting “is our only way to have input into the process.”

In March, the federal government announced plans to reduce Agriculture and Agri-Food Canada’s annual budget by $310 million over the next three years. During an August media information session, a senior AAFC official said he could not speculate about savings targets in connection with Growing Forward 2’s business risk management programs because they would be under discussion by politicians in Whitehorse next week.

The meeting takes place Sept. 12. BF