Ontario farmers rely on business risk management (BRM) programs to manage and mitigate the impact of weather and other unavoidable variables farmers face in their businesses. Ontario farmers have access to BRM programs, funded in part by individual farmers and the government.
Changes are expected to take effect April 1, 2018 to existing BRM programs as a result of the next Agricultural-Provincial Policy Framework, renamed the Canadian Agricultural Partnership (CAP).
Business Risk Management Program Review
In July 2017, it was announced that “governments will undertake a review of the Business Risk Management Programs to assess program effectiveness and impact on growth and innovation.” The review is expected to begin in fall 2017, with any recommendations being brought forward for consideration to the agriculture ministers meeting in July 2018. The stated focus will be to improve the timeliness, simplicity and predictability of the current BRM programs while remaining cost neutral.
Changes to AgriStability program
Reference Margin Limit (RML) Capped
What is the Reference Margin Limit (RML): This was a feature added to AgriStability under Growing Forward 2 (GF2) that limited producers payment trigger to the lower of their reference margin or their allowable expenses. This change severely reduced coverage for producers with low cost structures.
What is changing: RML will be capped and all producers will be guaranteed at least 70% of their reference margin. This will provide increased coverage for those producers whose allowable expenses are below 70% of their reference margin.
AgriStability Late Participation Mechanism
What is changing: A late participation mechanism will be added to allow the province to accept
late applications in “situations where there is a significant income decline and a gap in participation.” This mechanism will be similar to the AgriRecovery framework, where the Ontario minister of agriculture will be able to request to the federal government that late applications be accepted for the entire province, a specific region of the province or a specific commodity within the province. If the mechanism is put in place, any payments would be reduced by 20%.
Changes to AgriInvest
Reduction in Allowable Net Sales (ANS) under AgriInvest
What is changing: The Allowable Net Sales (ANS) under AgriInvest will be reduced from $1.5 million to $1 million. Given the fact that the maximum government matching contribution is 1% of ANS, the maximum government matching contribution under AgriInvest will be reduced from $15,000 to $10,000. This move will impact any larger producers who have an annual ANS greater than $1 million.
Minimum Payments for both AgriStability & AgriInvest
What is changing: To improve administrative efficiency the minimum payment under AgriInvest and AgriStabilty will be increased to $250.
OFA fully supports the request for adequate and bankable risk management programming.
OFA remains actively involved in the government’s current program review to advocate for the program changes needed to help Ontario farmers effectively manage risk.