Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

November 17, 2007 14:18 ET

Communique Federal-Provincial-Territorial: Agriculture Ministers Announce Progress on New Programs for Canada's Ag Sector

TORONTO, ONTARIO--(Marketwire - Nov. 17, 2007) - Ministers of Agriculture from federal, provincial and territorial governments met this week in Toronto, announcing significant progress on programs in the new business risk management (BRM) suite for farmers and other elements of Growing Forward, the new policy framework for Canada's agriculture, agri-food and agri-based products industry.(i)

Recognizing the importance of a smooth transition to Growing Forward, Ministers also announced they intend to seek the authorities needed to continue non-BRM programming currently in place under the Agricultural Policy Framework (APF) for up to one additional year. This would provide for a transition period while Growing Forward programs are developed and implemented.

The Suite of BRM Programs

AgriInvest, AgriStability, AgriRecovery and AgriInsurance were announced in June and form a new suite of BRM programs for farmers.

Ministers agreed to seek authorities from their governments, and pending finalization and approval, to implement the following:

- AgriInvest, producer accounts that provide coverage for small margin declines;

- AgriStability, the improved margin-based program that provides producers with assistance for larger income declines; and

- AgriRecovery, the disaster relief framework.

AgriInvest was developed in close collaboration with producers and producer organizations. It will replace the coverage under the Canadian Agricultural Income Stabilization (CAIS) program for margin losses of 15 per cent or less. Through government and farmer contributions to producer accounts, it will provide producers with flexible coverage for small income declines as well as support for investments to mitigate risks or improve market income. With agreement on AgriInvest, the federal $600 million Kickstart for producer accounts can start flowing early in 2008.

Provinces are seeking authority from their respective governments on the details of this program. Under this program, producers who make a deposit to their AgriInvest account will receive a matching government contribution based on a percentage of allowable net sales of eligible commodities. AgriInvest responds to the long-standing desire of producers for programming that allows them to better predict their government contribution in a given year.

AgriStability is an improved margin-based program that will provide farmers with assistance for larger income declines. It replaces the coverage previously available under CAIS, compensating producers when their margin in the program year is more than 15 percent lower than their reference margin - their average margin from previous years.

Ministers agreed to request authorities from their governments for AgriStability. Producers who participated in 2006 CAIS will automatically receive a notice with information on their fee. Others are encouraged to contact their program administration for information on how to participate. The deadline to enroll and pay the fee is December 31, 2007.

Ministers agreed on the details of AgriRecovery, the disaster relief framework which ensures rapid assistance for producers hit by smaller natural disasters - those that are regional in scope, have a relatively small impact on the Canadian industry, can be easily contained, and have few trade implications. Ministers committed to seek authorities to jointly fund these types of disasters on a 60/40 federal/provincial-territorial basis.

Ministers also discussed how their governments would respond in the case of larger natural disasters - ones that result in relatively large costs to governments, are national in scope, significantly affect the competitiveness of the Canadian agricultural sector, and result in potential health risks to Canadians as well as in significant trade implications. When larger disasters strike, ministers committed that their governments would work together to quickly address the unique circumstances and respond to the needs of producers.

Federal, provincial and territorial governments are continuing work to enhance production insurance plans under AgriInsurance to better meet the needs of producers.

Working with Stakeholders and Ensuring a Smooth Transition to Growing Forward

Ministers recognized the best approach is one that addresses the needs of farmers and the sector as a whole. To ensure that those in the industry have a voice in the development of new programs under Growing Forward and to ensure a smooth transition from the current APF, Ministers agreed to seek the authorities needed for a transition period of up to one additional year starting April 1, 2008 during which time current APF programs would continue until new programs under Growing Forward are established. Ministers will be holding further discussions on funding issues.

Governments will work closely with farmers and sector organizations on program design. Ministers committed to provide farmers and others in the sector notice well in advance of any program changes.

Provincial and territorial governments have been engaging stakeholders over the past few months on Growing Forward. Further grassroots input will be gathered through provincial and territorial consultations, which will be followed by national consultations early in the new year. These additional consultation sessions will focus on ensuring new Growing Forward programs are designed to:

- Encourage an approach to innovation that encompasses the full continuum from basic research to practical implementation integrating the best ideas from other sectors and countries;

- Generate benefits for the sector and all Canadians by contributing to priorities ranging from food safety, to environmental sustainability, to health and wellness;

- Enable provincial-territorial flexibility, consistent with national objectives, so that provinces and territories can adapt programming to local needs;

- Modernize and implement innovative regulations and standards in a way that ensures society's needs are met and contributes to the sector's competitiveness; and

- Ensure streamlined, transparent and efficient service delivery for all programs.

FPT Action Plan

Ministers discussed in depth the rapidly escalating pressures on cattle and hog producers. They agreed to develop a joint industry-government action plan to address these challenges and to support long-term profitability of the sector. Ministers agreed to a set of principles to guide them in their discussions with the livestock sector. These principles are:

- A coordinated national approach is necessary;

- Governments' response will be developed in full partnership with industry;

- Responses should not mask market signals;

- Any action must be fully consistent with Canada's trade obligations;

- Actions will encourage sound business planning and practices towards a profitable future; and

- The short term response should be consistent with a long term competitiveness and profitability strategy.

Ministers agreed they would:

- Accelerate access to existing programs such as targeted advances and interim payments under AgriStability, AgriInvest and the federal $600 million Kickstart program, and improve access to the Advance Payments Program;

- Work with industry to improve Canada's export market position; and

- Work to enhance competitiveness and profitability by modernizing and streamlining regulations, including addressing regulatory issues identified by industry.

Ministers directed officials from both levels of government to meet with the livestock industry as soon as possible in a concerted national approach focused on identifying how these actions can support its long term strategies. Ministers also directed officials to address similar issues faced by the Ontario horticultural sector.

World Trade Organization

Ministers also reviewed the status of the World Trade Organization (WTO) agriculture negotiations and noted the intensive efforts underway by WTO Members since September to make progress toward successful conclusion to the Doha round. Ministers affirmed Canada's continued, strong interest in pressing for an ambitious outcome from the negotiations for the benefits of Canada's entire agriculture sector, including both supply-managed and export-oriented industries.

Agreement on Internal Trade

Ministers directed officials to continue work toward finalizing wording for the Agriculture and Food Goods Chapter of the Agreement on Internal Trade.

Ministers will be holding a conference call in December and a further meeting early in 2008.

(i) The new Saskatchewan government will indicate its position on the issues in this communique in due course.

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