TheBeefSite.com - news, features, articles and disease information for the beef industry

News

Canada improves the AgriStability program to better support farmers

30 March 2021

During a recent virtual meeting of Canada’s federal, provincial, and territorial (FPT) Ministers of Agriculture, Ministers agreed to remove the reference margin limit for AgriStability, one of the business risk management (BRM) programs under the Canadian Agricultural Partnership.

The removal of the reference margin limit will be made retroactive to the 2020 program year. In addition, the deadline for producers to enroll in the 2021 program year will be extended to 30 June 2021.

The meeting was convened to discuss key changes to the program, in order to better support farmers facing challenges. Removing the reference margin limit could increase the overall amount AgriStability pays out to farmers by approximately $95 million nationally.

The objectives in making this change are to help simplify the program and help farmers in need by increasing the level of support for agricultural operations with lower allowable expenses. This change is an important step towards making the program easier to understand, more bankable, more accessible, and more fair for some sectors, who might have been left out of the program under the previous rules.

Costs for the removal of the reference margin limit will be shared, as outlined in the Canadian Agricultural Partnership; 60% by the federal government and 40% by provincial and territorial governments.

This change will help producers better manage risks and financial losses due to poor yields, low commodity prices or rising input costs. AgriStability provides support when producers experience a large margin decline.

Speaking about the decision, Ernie Hardeman, Ontario's minister of agriculture said, “...our farmers have always worked tirelessly to ensure Canadians have access to safe, healthy, locally produced food – especially so during this pandemic. As agriculture ministers, it is our responsibility to assist them in those efforts and removing the reference margin limit beginning in the 2020 program year is going to provide help to farmers that are facing challenging times right now. It is important we continue our discussions to work on further improvements to the AgriStability program to support our farmers and critical agri-food sector.”

The federal government first tabled its AgriStability proposal during the last FPT Ministers conference in November 2020. At that time, Ministers agreed that BRM programs needed to improve to better target emerging risks that threaten the viability of the farm. As well, programs should be simple, predictable, and respond quickly for producers, while treating farms fairly and equitably.

Ministers also noted that analysis continues on alternative risk management designs. This analysis will inform upcoming discussions on longer-term reforms, set to take place at their next in-person Annual Conference in Guelph, Ontario scheduled for September 8-10, 2021.

Ministers also recognize the importance of close collaboration with each other to ensure the successful development and implementation of the next five-year agricultural policy framework, expected to be in place on April 1, 2023.

“This is a big win for farmers across Canada, resulting in about $95 million per year. Thank you to all of the farmers and producer groups who got behind the federal offer. Our offer remains on the table for cost-shared improvements to the compensation rate. Canadian agriculture is a shared jurisdiction and we’ve been clear BRM improvements must respect the cost-shared fundamentals,” federal Agriculture Minister Marie-Claude Bibeau said. 

Background

  • The business risk management suite of programs, including AgriStability, helps producers manage risks such as natural disasters, weather events, severe loss and market volatility. Farmers are always encouraged to make use of the programs. AgriStability protects Canadian producers against large declines in farming income for reasons such as production loss, increased costs and market conditions.
  • Other improvements to BRM programs were announced in 2020 as a response to COVID-19. These changes extended the AgriStability enrollment deadline for the 2020 program year and boosted interim payments in most jurisdictions from 50 to 75%. The federal government, along with the participation of several provinces, also committed up to $125 million to AgriRecovery to help beef, pork, and other producers cover up to 90% of extraordinary costs related to the pandemic.
  • The Canadian Agricultural Partnership is a five-year, $3 billion investment by Canada's federal, provincial and territorial governments to strengthen and grow Canada's agri-food and agri-products sectors. In addition, under the Partnership, producers have access to a suite of business risk management programs to help them manage significant risks that threaten the viability of their farm and are beyond their capacity to manage.
  • Agriculture and agri-food continues to be an economic engine driving Canada’s economy, contributing more than $140 billion to GDP and responsible for 2.3 million jobs.
  • With market demand for agricultural commodities remaining strong, further growth will continue into 2021 on the expectation that normal market conditions resume.


Partners


Seasonal Picks

Managing Pig Health: A Reference for the Farm - 2nd Edition