by SUSAN MANN
The provincial government has declined to increase the Ontario business risk management program cap in its 2016 budget as requested by commodity groups, but Ontario Agriculture Minister Jeff Leal says there’s an opportunity to get federal funding for the program.
The Ontario Agriculture Sustainability Coalition (OASC), whose representatives include Grain Farmers of Ontario, Beef Farmers of Ontario, Ontario Pork, the Ontario Sheep Marketing Agency and Veal Farmers of Ontario, had requested in its pre-budget submission the government raise the $100 million annual cap by $25 million a year over three years. The coalition wanted the first increase to kick in this year.
The coalition was formed in 2009 to develop and implement the Ontario risk management program with the provincial government.
Mark Brock, chair of Grain Farmers of Ontario, says they’re happy to see the program still get support in the budget. “I think we’re disappointed we didn’t see the additional $25 million that we were asking for. We had put a lot of effort into it (requesting the increase) over the past little while in meetings with elected officials and the bureaucracy to talk about the value of the program.”
Brock says OASC isn’t giving up and plans to request the increase as part of the next budget.
Other government risk management programs, such as AgriStability, AgriInvest and production insurance, are funded through a cost-sharing agreement between the federal and provincial governments, with Canada paying 60 per cent and the province paying 40 per cent. The Ontario business risk management program only gets a 40 per cent contribution from the provincial government. The Conservative federal government, in place before the 2015 election when the Liberals won a majority, had declined to contribute any funds to it.
But that could change, Leal says. He notes he’s very pleased “that within my budget we’ll retain the $100 million for the risk management program.”
Leal says he met with federal Agriculture and Agri-Food Minister Lawrence MacAulay in Ottawa in November. “We believe there’s an opportunity with Growing Forward 3, with negotiations commencing this calendar year, to finally bring the federal government on board to make it a whole program for Ontario farmers and the federal government contributing their 60 per cent share.”
Leal says they will “continue to press this and we believe we have a great window of opportunity with the new minister.”
Brock says “we’re all encouraged to see discussions around business risk management programs in the agricultural policy framework.” However the federal government is still fairly new, and he says farm leaders just don’t know yet what its “appetite is to delve into the realm safety net programs.”
Growing Forward is Canada’s national policy framework for the agricultural sector. The current set of programs under Growing Forward 2 began in 2013 and run until 2018 so it could be two years before Ontario farmers get any federal funding under the business risk management program, if the federal government agrees to fund it.
The $100 million annual cap on the Ontario business risk management program has been in place since 2013. The coalition has argued the existing funding levels don’t adequately meet the program’s needs.
The risk management program for grains and oilseeds began as a pilot in 2007 and was turned into a permanent program in 2011 when the permanent programs for beef, hogs, sheep and veal and the self-directed risk management program for edible horticulture were launched. Developed by the commodity groups, the risk management programs work like insurance to help farmers offset losses caused by low commodity prices and rising production costs. Participants pay premiums based on their annual anticipated sales and chosen coverage levels.
For self-directed risk management there aren’t any premiums. Farmers deposit funds into an account with Agricorp and that money is matched by government up to a maximum based on farm sales. The program helps growers cover various farm risks.
Conservative agriculture critic Toby Barrett, the MPP for Haldimand-Norfolk, was critical of the government for failing to raise the risk management program cap, introducing a 4.3 cents a litre gasoline tax as part of its cap and trade system on greenhouse gas emissions, failing to bring in a electricity rate for farm businesses and continuing with its commitment to introduce the Ontario Retirement Pension Fund. Incorporated farm businesses and their employees will be required to make payments as part of the fund and “that’s a four per cent hit,” he says.
Barrett says he’s heard from many farmers and small business owners who find the proposed pension plan and soaring electricity rates burdensome and are ready to call it quits.
Barrett also lambasted the government for ignoring agriculture in the budget, something it has done, he says, year after year.
Leal disagreed agriculture was ignored in the budget. He says he’s been an MPP for almost 13 years and this is the first time that he can recall, “agriculture had multiple mentions within the budget document.”
Barrett also says the Ontario Ministry of Agriculture, Food and Rural Affairs budget was cut to $916 million from $943 million. However, Leal says “the way to look at this is to look at the results that we’re getting from our investments. When you look at Ontario’s agriculture sector, we’re helping to lead the way in jobs and growth and allowing my colleague, (Finance Minister Charles Sousa) to reach his deficit targets. That’s good news for Ontario.”
In a Thursday news release that followed the budget announcement, Barrett criticized the decision not to renew the Local Food Fund. A ministry spokesperson has previously indicated there were no plans to renew the three-year $10 million fund that was launched in 2013.
Asked if there were any program cuts within OMAFRA because of the budget cut, Leal says, “we’ll continue with our full suite of programs.”
About expanding natural gas infrastructure in rural Ontario, something the Ontario Federation of Agriculture has requested, Leal says “we put in the budget the timeframe for moving ahead with the natural gas initiative in Ontario.” The expansion of the natural gas infrastructure in rural Ontario “will be moving forward in this calendar year.”
The government also made a commitment to review the tax treatment for on-farm value-added activities. “This is a great leap forward in terms of property taxation for our farmers in Ontario,” he says.
Leal notes the government is spending $3 million over the next four years in the bio-economy through the Investment in the Bio-Industry Innovation Canada program.
One major announcement of interest to the agricultural industry is the introduction of a regulation to implement a cap and trade system on greenhouse gas emissions. The system will operate under the Western Climate Initiative with Quebec and California, says a spokesperson for Clean Energy Canada, a climate and energy think tank.
Don McCabe, Ontario Federation of Agriculture, and Clarence Nywening, Christian Farmers Federation of Ontario president, couldn’t be reached for comment. BF
Comments
Why was John Vanthof the NDP Ag Critic not asked to comment . In reality of the three Ag reps in Gov , John is the real farmer of the three .
Further ..... In being fair and unbiased , NFU should have been contacted and asked to comment . NFU is also an accredited General Farm Org so why no comment from them ?
Editor: Comment will be published if resubmitted and signed.
The RMP would be far better for the average farmer if there was an individual cap , not allowing a few big operators to take the majority of the dollars .
Unfortunately, it set far to high to prevent the big operators from taking the majority of the money.
see: http://www.agricorp.com/en-ca/Programs/RMP/Cattle/Pages/HowItWorks.aspx
Quote: Payment caps
RMP payments for each livestock category are capped at $1.2 million per participant, per program year. For example, if you participate in the cow-calf and the feedlot categories under RMP: Cattle and the grower/finisher category under RMP: Hogs, your payment for each of the three categories is capped at $1.2 million.
So, if a few hog farmers as mentioned in the above posting were to each cap out at the $1.2 million individual limit, then it would only take $100 million/ $1.2 = 83 farmers to cap out the program. Perhaps the $1.2 million is tad too high? Maybe something for the gov't to think about?
Caps are easily evaded simply by forming clone companies with a different ownership structure and/or Board of Directors.
For example, back in the 60s and 70s, the USDA had, if my memory is correct, a $250,000 sales cap for a certain program or a set of programs. Farmers immediately responded by setting up:
(A) their 90-year-old great-aunt Agnes from Omaha
(B) their hired man's brother who worked in a gas station in Muscatine
(C) their sister from Chicago
as the principal operator of whatever number of farms it took to come close to, but not above, the $250,000 cap.
This type of action is, of course, in response to having a consistently-generous enough program to warrant setting these things up - I doubt that either RMP or AgriStability provides that much of an incentive.
Stephen Thompson, Clinton ON
Yes, but at least the U.S. system is somewhat transparent as witnessed by the EWG.org numbers. Try doing that same number comparison here in Canada? The fact is, Can-Ont. individual cap levels at $1.2M and $3M are set at obscenely high levels while the overall program investment levels are capped at low levels. Even more interesting, is that Can-Ont. investment support numbers offer no specific commodity transparency in which to do cross border competitive comparisons.
Farm groups, politicians and the like that come up with various support programs(SM included) never consider the long term impacts of them. Anonymous posters are in denial about this also.
For example, it was only 10 years ago when prices were considered low for grains. Farmers were pouting. Land in my area was $5000/acre and rent was $180-200
Interest was slightly higher, but hey, it was tax deductible!
Fast forward to present day and crop prices have not doubled, but rent has, and land has tripled.
So why do we need an increase of the cap???? Why do we need some programs?
Raube Beuerman
You state your case well that as a hobby farmer/custom feeder you don't know what other countries have for farm support programs and what a farmer has to compete against in a global market .
The argument that hobby farmers "don't know what other countries have for farm support programs" is little more than a variant of the argument often proffered by supply management supporters to the effect that only current quota owners are qualified to express an opinion about dairy issues.
This type of mindset, alas, speaks volumes about the extent to which the farm community still distrusts anyone:
(1) with more than a Grade 8 education
(2) who doesn't live on a rural-route
(3) who reads the Globe and Mail, and even worse, anyone who writes for it
Stephen Thompson, Clinton ON
Nonsense Raube. You might want to ask your local Pork or Beef board why they want to raise the cap. While your at it, you may also want to see if EWG.org would do a competitive evaluation of Canadian-Ontario-Quebec programs compared to U.S. for Livestock- Hort.-Fruit and Veg.-Grains.
The fact that these two posters want to compare province to province or country to country is irrelevant and does not make my post incorrect. The fact of the matter is that any support program leads to an increased cost structure which negates any intended benefit of the program in the first place. This has been played out numerous times and facts don't lie.
Raube Beuerman
Correct the facts don't lie so when are you going to state facts rather than your opinion ? Fact is real farmers compete in a global market.
Do you actually understand the program ? I would think not since you don't participate in any or get any subsidies .
Didn't you also state that anonymous posts weren't worth replying to !
Bet you can't eat just one !
I have recently posted the numbers, they are real and they speak for themselves. I have no hidden agenda, as I sign my name.
But you seem to be looking down on me and a few others from a high horse for some reason. Why don't you come down off of it?
Raube Beuerman
Whenever I was part of a delegation sent to lobby our former MP, Paul Steckle about the need to increase any given farm support program, he'd ask - "Why should government do that, all it will mean is that people will offer me more money to rent my farm?"
Steckle was right, but never did understand (at least publicly) that his observations about government support getting capitalized back into asset values also applied to supply management, which, alas, he supported.
Stephen Thompson, Clinton ON
Welcome to the real world on planet earth.There is no such thing as absolute free trade or even fair trade. Wish you luck in trying to get a level playing field in World Agriculture. Furthermore, it is no secret that the European and U.S. Farm Bills plus other countries such as Japan all have various forms of regulated protection and investment support for their agriculture. In fact, some retired politicians often claim they couldn't support farmers because they forgot it was a competitive investment. To add insult to trade injury, some retired politicians are often the first to jump on the subsidised wind turbine bandwagon which provide expensive, intermittent, surplus power. "Pot calling the kettle black" or "Do as I say not as I do" comes to mind. Depends on who's ox is being gored as always.
We heard for years COOL was costing the pork and beef industries billions annually in lost revenue, that now should be "found" money ! They have a lot of gall now asking for an increase in RMP contributions.
The other grain,sheep and veal farmers are probably vindicated asking for a hike, the other 2 ... Not so much!
Once again it is a problem with double dipping of the program . Close the loop holes and it will fix it self .
The new question then is if producers received any money from Gov because of COOL then they should have to pay it back . Right !
Now then this new found COOL money will get distributed to people who are no longer farming and dead people like past programs . Sighhh
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