Comment: Producers biggest losers of slow RMP talks

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Politicians from different levels of government and party stripe continue to debate how to improve Canada’s business risk management programs – but already, producers have lost.

Finger-pointing among elected officials began almost as soon as the latest round of federal-provincial-territorial agriculture minister meetings ended with no consensus on changes to business risk managements (BRM) programming being reached.

The provinces, represented by Ontario’s agriculture minister Ernie Hardemann, rightfully made the point federal minister Marie-Claude Bibeau waited until the final day of the meetings to put an offer on the table to reform business risk management’s biggest irritant and the focal point of reforms, AgriStability.

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Considering the parties had spoken more than 20 times, Bibeau did not have to wait so long to make her position clear.

She had previously rejected the province’s offer to have the cost sharing of the programs move from a 60-40 split between federal and provincial coffers to a 90-10 split.

Even in the unprecedented age ushered in by Covid-19, such a drastic shift in how these programs are paid for was never going to happen.

Bibeau can’t escape blame for the lack of reform – as the federal minister, the buck should ultimately stop with her.

As was clear even before the pandemic, Canada’s massive deficit meant Bibeau was more likely to buy time on reforming the programs rather than immediately put up cash.

Now, at least the federal government is willing to make the program easier to access and pay producers more when they do receive an AgriStability pay out – but that change won’t be coming soon, if ever.

There is no deadline for when the provinces are now expected to respond to her proposal.

As it all stands now it is likely the provinces, who have to reach some consensus among themselves before agreeing to anything, are going to reject the federal proposal.

The lines in the sand drawn by Bibeau, like removing the reference margin limit and maintaining 60-40 cost sharing, will continue to be a barrier to concluding any immediate reforms.

Meanwhile, those provinces claiming they can’t pay for the proposed changes given their current fiscal situation should consider doing a more thorough review of their finances.

Manitoba’s agriculture minister says Bibeau’s proposal would cost at least $15 million more a year for his province.

Pre-pandemic, while still combating a deficit, Manitoba increased its agriculture budget by $8 million.

If $15 million is going to make or break the finances of Manitoba, the province has bigger problems. It’s a lot of money, but consider that figure in the context of a province with a $15 billion budget.

Plus, presumably there would be some increased costs associated with designing and launching an entirely new program to replace AgriStability, as Pedersen has suggested doing.

Saskatchewan’s agriculture minister Dave Marit has also raised concern his government will have difficulty paying for changes. Like his colleague in Manitoba, Marit is part of a government fighting a pre-pandemic deficit.

Currently Saskatchewan is using massive federal transfers to boast about reducing the deficit faster than expected (almost 90 per cent of so-called “new” and “unexpected” revenue to Saskatchewan came from Ottawa, according to the province’s latest financial update).

Yet Marit wants the federal government to pay more money for AgriStability while simultaneously his government is sitting on a $260 million “contingency” fund to deal with uncertainty.

Perhaps Marit could consider taking a small portion of that money and directing it to AgriStability.

There’s also the nagging point that money for business risk management needs to be budgeted each year, but is only used when needed.

(On that note: this fiscal year, Saskatchewan reduced its agriculture budget by $205.1 million).

The failings of politicians mean AgriStability likely won’t have any changes until 2023, when many of these very same elected officials will endeavour to make substantive changes to business risk management programs as part of a new federal-provincial-territorial agreement.

Through no failure of their own, producers continue to lose as a result.

Source: Farmtario.com

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