Farmers require stability and predictability

By MPP Toby Barrett

Mid-winter is the time for farm meetings as well as the Finance Committee’s annual pre-budget tour. What I’ve been hearing from various cash-crop, pork, beef, hort and general farm organizations is the ongoing need for a Business Risk Management Program.

A solution is needed now and in the future. The current federal Agri Stabilty approach is not enough of an insurance program to protect farmers.

A Business Risk Management Program for non-supply-managed commodities brings a measure of stability, predictability and bankability to volatile agri-business – but it must be a permanent program to be successful in the long run. Farmers should not have to go back to government year after year and crisis after crisis. For family farm operations the volatility of agriculture markets puts considerable stress on finances. RMP provides the ability to plan for the future by providing a sense of long-term stability.

The Risk Management Program (RMP) is similar to an insurance program in that farmers pay a premium to protect against such uncontrolled factors as:

  • the volatility and collapse of commodity prices
  • unexpected increases in the cost of inputs such as fertilizer and oil, and
  • the high Canadian dollar and currency fluctuation

RMP claims are only triggered if the market price for a commodity falls below a provincial average cost of production.

In 2007, after intensive lobbying by Ontario Grain and Oilseeds – which launched the Farmers Feed Cities campaign – the McGuinty government announced the Grain and Oilseed Business Risk Management program as a three-year pilot program jointly funded by the provincial government and farmers, through insurance-type premiums.

In the three years of the pilot project, grain farmers have paid $48 million in RMP premiums and the government has paid out $66 million. The total cost to the government in those three years was about $18 million.

After three years, despite the success of the program and repeated requests from grain farmers, the McGuinty government cancelled the program. On July 30, 2010 the McGuinty government announced an extension for the 2010 crop year.

When they cancelled the program at the end of the three years the McGuinty government claimed it was not effective without contributions from the federal government. However, farmers have said that it is working and important to continue the provincial support regardless of other levels of support – so often we see Alberta and Quebec first to the plate to support their farmers.

While farmers in Ontario continue to wait for their province to make the first step on a  permanent and bankable program we continue to be told by the province that the federal government needs to come on board as funding partners. However, the federal government has stated that they will not re-visit business risk management programming until 2013 when the Growing Forward agreement expires. This could be too late – not only for cash crop, but also for hogs, cattle, horticultural crops,…..

At the International Plowing Match in St. Thomas Tim Hudak committed that the Official Opposition would work with farm leaders to create a business risk management program based on cost of production for all sectors – time is ticking as farmers continue to wait to see where McGuinty’s commitments lie.