By Alice McFarlane

Urgent changes needed for business risk management programs: Agricultural Producers’ Association says

Jun 12, 2020 | 4:20 PM

The Agricultural Producers’ Association of Saskatchewan (APAS) shared its concerns about current business risk management programs (BRM) during today’s House of Commons Standing Committee on Agriculture and Agri-Food.

Current BRM’s include AgriStability, crop insurance and Agri-Invest.

APAS President Todd Lewis said members are concerned about poor coverage levels since changes were implemented in 2013. He said APAS would like to see an increase in coverage from 70 per cent to 85 per cent as well as the elimination of the reference margin limit.

Under 50 per cent of Saskatchewan producers are enrolled in AgriStability. Lewis said producers see little value in the current program.

“The risk of paying the cost associated to enroll is not worth the reward to trigger a payment,” Lewis said. “Producers have largely given up on the program with its low coverage levels, administrative barriers, and unequal coverage to livestock and mixed farm operations. This has resulted in low participation.”

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Lewis said 2018 farm income data released this spring showed Saskatchewan farm income dropped by 28 per cent and BRM support payments dropped by 31 per cent, the lowest level since 2009.

“A properly designed BRM should provide a backstop for this large of a revenue drop.”

Lewis said in 2019, grain and oilseed producers were hurt by a drop in commodity prices caused by trade disputes, drought, transportation delays and a late, wet harvest season. There were further disruptions in 2020 due to the pandemic which caused a serious revenue problem for cattle and hog producers.

“It is clear the current AgriStability program will not provide enough coverage in those sectors,” he said.

APAS released updated research that demonstrated the limitations of the AgriStability program. Lewis said the example shows there would have to be a drop of over 40 per cent in the price of canola, a decrease of $11 per bushel to $6.35 per bushel before it would trigger AgriStability coverage under the current model.

Lewis said there is no reason to eliminate the existing programs but there should be an increase of coverage levels for AgriStability and an elimination of the reference margin limit.

“APAS has been warning for years that AgriStability doesn’t work,” Lewis said. “Now with COVID-19 producers are experiencing firsthand how the program is failing. It’s the perfect opportunity to make changes that will ensure a more food secure Canada going forward.”

Lewis said the federal government put 100 per cent of the money into the Canada Emergency Response Benefit (CERB) and it should step up and provide more support under current BRM programs to make them more usable for producers.

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alice.mcfarlane@jpbg.ca

On Twitter: @AliceMcF