NFU encouraged by progress on AgriStability

OPINION – The recent federal-provincial-territorial conference of agriculture ministers made encouraging progress towards reforming AgriStability, one of the key Business Risk Programs under the Canadian Agriculture Partnership agreement.

While a final agreement has not yet been reached, provincial ministers are now considering federal Agriculture Minister Bibeau’s proposal for two important and significant changes: ending the margin cap and increasing the margin loss trigger from 70 per cent to 80% of participating farms’ reference margin. After several years with no progress, this announcement is encouraging.

The National Farmers Union wrote to Minister Bibeau on April 21, urging a return to the pre-2012 framework, with a margin loss trigger of 85 per cent and no margin cap.

The margin cap, introduced by former Agriculture Minister Ritz, calculates payouts in the program year based on the lesser of the farm’s actual margin or its total allowable expenses for the year. Allowable expenses include non-family labour and most agro-chemical inputs, some kinds of insurance premiums, heating fuel, electricity, etc. As a result, family farms that provide their own labour, and farms that operate efficiently by minimizing purchased inputs, are far less likely to benefit from AgriStability in the event of economic conditions that significantly reduce their revenues.

Eliminating the margin cap would provide a significant increase in the support provided by AgriStability. Minister Bibeau’s estimate is that total government payouts under the program would increase by 30% compared with the existing criteria. It also would make the program fairer and more useful to a wider range of Canada’s farms. Increasing the margin loss trigger from the current 70 per cent back up to 85 per cent, as the NFU has requested, would further increase total AgriStability payouts by more than 50 per cent above the existing program’s.

Increasing the margin loss trigger back to 85% would have a stabilizing effect by reducing the economic impact of market and weather volatility. Removing the margin cap will mean more of the support money paid out to farmers will stay in local economies to support jobs, businesses, and community life.

In addition, the NFU continues to urge both federal and provincial governments to pursue policies that improve the long-term economic and environmental sustainability of farms and ensure that farm livelihoods make farming a viable occupation for young farmers. Well-designed, fair, and accessible Business Risk Programs are necessary to ensure farmers have the support they need when they experience losses due to market or climate conditions beyond their control.