Issues at a Glance

Concerns of Ontario Grain and Oilseed Groups Regarding the Potential Viability of the Proposed Business Risk Management Pillar of the Agricultural Policy Framework (APF)

Background
• Business Risk Management (BRM) is one of the 5 pillars of the proposed Agricultural Policy Framework (APF). Existing business risk management (or safety net) programs include both whole farm income stabilization programs and companion programs that address specific sector needs. Total funding for risk management in the agricultural sector has totaled approximately $2.9 billion for the last three years.
• Under the proposed BRM pillar, all existing Safety Net programs will be discontinued, and replaced by two whole farm programs – a revised NISA program and Production Insurance (enhanced crop insurance program including horticulture crops and potentially livestock).

As currently proposed, Business Risk Management under the APF
• reduces combined federal-provincial funding from $2.9 billion to $1.9 billion annually
• ignores the realities of the business climate in which Canadian agriculture operates, including the impact of International Trade, in particular U.S. ag policy
• relies exclusively on demand-driven funding: no provincial allocation.

Impact
The gap between Canada’s farmers and our direct competitors (particularly in the U.S.) will continue to widen, undermining reasonably successful efforts to create a level playing field over the last three years. It is expected that Ontario will receive significantly less funding under new allocation arrangements.

What is needed
Extension of March 31, 2003 deadline:
• Proposed BRM programs must be improved and finalized before existing programs can be discontinued: current safety net programs and funding levels need to be extended.
• Current BRM funding levels must be maintained for the duration of the APF.
• Grower involvement and input must be actively sought and utilized in design and development of all programs under the APF.
• Adequate funding must be provided for the delivery of all APF programs.
• Equitable provincial allocations must be included to ensure fair treatment for all provinces.
• Design, implementation and funding of programs must be based on a realistic appraisal of the business climate for Canadian agriculture, including recognition of the role of International Trade Policy and its impact on Canadian producers.

Issues at a Glance is a new feature for the Ontario Corn Producer magazine. It is designed to provide our members and other readers with key information on OCPA’s top priority issues in an accessible format. Remove this page by cutting along the dotted line and share it with your MP, MPP, and others who can provide assistance in our efforts to ensure the ongoing viability of corn production in Ontario.

The two figures below illustrate the concerns of Ontario grain and oilseed groups regarding proposed business risk management programming under the Agricultural Policy Framework.

Figure 1 – The Shrinking Safety Net Pie shows how support for grain and oilseed producers will decline as current federal/provincial funding is reduced from present levels, provincial allocation formulas are abandoned and companion programs such as Market Revenue Insurance are dropped.

Figure 2 provides an overview of current agricultural safety net program funding in Canada in comparison to proposed funding under the Agricultural Policy Framework. The funding reductions proposed under the APF will undermine much of the progress made to date in leveling the playing field between Canadian producers and their direct competitors, particularly in the U.S.