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Farm-Support Programs Facing Potential Funding Cut

Just as drought-stricken Ontario farmers are looking to the government for aid, the federal agriculture ministry is poised to cut millions from farm-support programs such as crop insurance and disaster relief.

Negotiations are underway between the federal government and the provinces on the Growing Forward II agreement, a sequel to a five-year farm-support policy that has proved popular with crop growers and cattle producers.

However, the current policy, set to expire in March 2013, can be costly in bad years. According to officials familiar with the negotiations, the office of Agriculture Minister Gerry Ritz is seeking a higher threshold for access, lower payouts and financial caps on the AgriStability program, which provides money to farmers if their yearly income drops below a certain percent-age of a five-year average.

"Fundamentally, what is being proposed is shifting the risk onto the backs of farmers," says Mark Wales, who heads the Ontario Federation of Agriculture. "It's not about sharing the risk, it's about shifting it away from both levels of government."

Wales says the drought in Ontario, particularly the hard-hit regions of eastern Ontario, provides a lesson of the importance of government backing for the agricultural industry.

"The drought in Ontario highlights the need for the full suite of programs as they were designed, properly funded, to help when there's a problem," he says.

One of the proposed changes is the abolition of AgriRecovery, the disaster-relief portion of the Growing Forward agreement, under which the Ontario Ministry of Agriculture has applied for extra dollars to help farmers deal with the driest year in recent memory.

Agriculture Canada is attempting to save money in the face of a 10-per-cent cut in its budget over the next three years. It shares the cost of the Growing Forward programs with the provinces, but the federal government is still on the hook for 60 per cent of the spending.

A ministry spokesman says the government wants to create farm-support programs that encourage innovation and help the sector become more competitive over the long term.

"The time is right to look at changes that will enable Canadian farmers to further benefit from the marketplace and become more profitable over the long term," Patrick Girard wrote in an email.

"Our goal is to ensure government programs work well together to help farmers in cases of significant drops in income and disasters (as opposed to simply lower profits), while also ensuring our ability to invest in more strategic areas to promote growth."

When asked about the ru-moured cuts to AgriStability, Girard says negotiations are ongoing and all options remain on the table.

"Governments are looking at what works well and what doesn't," he says.

"Decisions are being driven by the demand from industry for more focus on innovation and market development and longer-term growth.

At the same time, governments want to make sure that taxpayers' dollars are spent where it makes the most impact for the future of agriculture."

The final policy framework won't be announced until the deal is signed in September during a meeting at Whitehorse, Girard says.

Wales and other industry representatives are dead set against cut to AgriStability funding. He says the government hasn't done enough to work with farmers and hear their side of the story.

"There haven't been any negotiations or consultations with the federal government whatsoever," he says.

"Farmers had little no say in the original design of AgriStability, but we've made lots of suggestions about how it could work better," Wales says. "Essentially gutting it doesn't make it work better, and that's what they're trying to do."

Erin Fletcher, who works with the Grain Farmers of Ontario, says her organization holds much the same position.

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