As the application deadline looms for AgriStability, national and provincial cattle groups are encouraging producers to take another look at the program while pushing for more improvements.
Earlier this spring, provincial and federal governments agreed to remove the reference margin limit for producers enrolled in the program, retroactive to 2020. They also extended the application deadline to June 30, to give producers more time to decide whether to enrol given the recent changes.
The reference margin limit prevented an operation’s reference margin from exceeding its average allowable expenses for the three years used to calculate the margin. In such cases, program administrators used a lower number that could reduce the margin by as much as 30 per cent.
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Provincial beef organizations and the Canadian Cattlemen’s Association (CCA) have been asking government to remove reference margin limits for some time. In the March 2021 issue of Canadian Cattlemen, CCA president Bob Lowe stated they were “pleased” to see the reference margin limit removed.
“This has long been a recommendation of CCA and a key ask we had of governments over the last years,” said Lowe.
The Alberta Beef Producers (ABP) also welcomed the end of the reference margin limit. “Producers have long been advocating for improvements to AgriStability. ABP has participated in discussions at every level to put forth solutions to the challenges expressed by producers,” said Melanie Wowk, ABP chair, in a release.
Removing the reference margin limit means another $95 million in funding through AgriStability, federal Agriculture Minister Marie-Claude Bibeau stated on Facebook. The reference margin limit was particularly limiting to the cow-calf sector. For example Ontario Beef magazine’s May issue notes that removing the reference margin limit would have increased the number of Ontario cow-calf operations triggering a payment by over 33 per cent in 2019, according to numbers crunched by the Ontario Ministry of Agriculture, Food and Rural Affairs. Ontario’s cow-calf producers would have seen total payments increase from $17 million to $23 million between 2013 and 2019, a 34 per cent increase. The feedlot sector in Ontario would have seen a one per cent increase in the same time period, as payments rose from $59 million to $65 million.
Under the next policy framework, the CCA would like to see more changes, such as removing the $3 million payment cap, increasing the AgriStability compensation rate and trigger and processing claims more quickly, including interim payment requests.
Meanwhile, D.C. Fraser reports in Manitoba Co-operator that ag ministers are discussing the possibility of replacing AgriStability with whole-farm margin insurance when the five-year Canadian Agricultural Partnership agreement between the feds and provinces renews in 2023. Under such a program, a farm’s insurable margin would be based on historical yields, expenses and prices. Farmers could then choose to insure anywhere from 50 to 90 per cent of that margin.
Alberta, Saskatchewan and Manitoba have formed the Whole Farm Margin Insurance Working Group. Both the provinces and feds are completing studies into the potential of such a program.
Brady Stadnicki, policy and program manager for the CCA, says whole-farm margin insurance is “an interesting discussion,” and adds that the CCA is interested to see what the exploratory studies yield. Until the study results are shared with industry, it’s hard to say whether such a program would serve beef producers. Right now, the private sector offers margin insurance for crop producers, but not for beef producers, Stadnicki notes. CCA is open to learning about other options, he says, but would need more information before changing its current course on advocating for more AgriStability improvements.
Discussions on more changes to business risk management programs, including AgriStability, are slated for later this year in Guelph, Ont., Fraser reports.
