Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

May 01, 2007 13:53 ET

AAFC: Canada's New Government to Provide Producers with $400 Million in Cost of Production Payments This Summer

OTTAWA, ONTARIO--(CCNMatthews - May 1, 2007) - The Honourable Chuck Strahl, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, announced today that the $400 million in cost of production payments will begin to be paid out to farmers in June 2007.

"Our government is aware that high production costs are cutting into producer income. This $400 million payment will help them deal with the rising costs they have faced over the past few years," said Minister Strahl. "And for the future, we have committed up to $100 million annually that would be paid into producer savings accounts to address increasing production costs."

Most producers will automatically receive a payment and do not have to apply. Initial cheques will begin flowing in June and are expected to be complete by the end of October. The initial payment will be based on 2.36 percent of a producer's net sales for 2000-2004. If funds remain, final payments will be made in December. (See attached backgrounder for more detail.)

The funds are part of a $1 billion commitment in Budget 2007 to improve national farm income programs. A kick-start payment of $600 million will be paid out to farmer savings accounts once agreement is reached with provinces and territories. Negotiations on the new program are now underway.

The new savings account program along with the disaster relief framework, improved production insurance, and an improved margin based program represents the federal government's proposal for the replacement of the Canadian Agricultural Income Stabilization program.


BACKGROUNDER

COST OF PRODUCTION PAYMENT - WHAT PRODUCERS NEED TO KNOW

The $400 million Cost of Production Payment is a direct payment to producers to help them deal with rising costs in recent years. Most producers will automatically receive a payment and do not have to apply. The federal government has also committed up to $100 million annually that would be paid into producer savings accounts to address increasing production costs.

WHO IS ELIGIBLE?

Producers of non-supply managed commodities reporting farm income for tax purposes for 2004. New producers of non-supply managed commodities reporting farm income for the first time in 2005 or 2006 are also eligible.

DO PRODUCERS NEED TO APPLY?

Producers who provided their 2004 farming income and expense information for the Canadian Agricultural Income Stabilization (CAIS) program do not need to apply.

Producers who did not provide their 2004 farming income and expense for CAIS, or producers who began farming after 2004, are eligible but must send in an application.

WHEN WILL APPLICATIONS BE AVAILABLE?

Applications will be available in late May. Producers will be notified through media and public notices when applications are available.

Applications can be requested now and will be mailed as soon as they are available. To request an application by email visit the program Web site (www.agr.gc.ca/cop) or call 1-866-367-8506.

WHAT IS THE DEADLINE TO APPLY?

The deadline to apply is September 1, 2007.

WHEN WILL PAYMENTS BE MADE?

Initial payments will begin flowing in late June and are expected to be complete by the end of October. Virtually all of the funds will be issued in the initial payments. If funds remain, final payments will be made in December.

HOW WILL PAYMENTS BE MADE?

For producers who farmed in 2004, initial payments will be based on 2.36 percent of an average of their net sales of qualifying commodities for the 2000 to 2004 period.

For producers who began farming after 2004, payments will be based on 2.36 percent of an average of 2005 and 2006 net sales.

WHERE CAN PRODUCERS GET MORE INFORMATION?

Producers can get more information by calling 1-866-367-8506 or by visiting the program Web site (www.agr.gc.ca/cop).

WHO WILL DELIVER THIS PROGRAM?

For producers in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Prince Edward Island, Yukon, Nova Scotia, Newfoundland and Labrador, and New Brunswick, the program will be delivered by the federal administration. Quebec has expressed an interest in delivering the program and negotiations are currently underway for them to deliver the funds provincially.

Contact Information

  • Agriculture and Agri-Food Canada - Ottawa, Ontario
    Media Relations
    613-759-7972
    1-866-345-7972
    or
    Minister Strahl's Office
    Ted Yeomans
    Press Secretary
    613-759-1059