Agriculture and Agri-Food Canada

Agriculture and Agri-Food Canada

September 27, 2005 14:38 ET

Improving the CAIS Program by the Honourable Andy Mitchell, P.C., M.P., Minister of Agriculture and Agri-Food

OTTAWA, ONTARIO--(CCNMatthews - Sept. 27, 2005) - The Canadian Agricultural Income Stabilization (CAIS) program is one of the two cornerstone federal-provincial-territorial agriculture programs in place to help farmers protect their income. Along with Production Insurance, CAIS provides significant assistance to producers. To date, more than $2.1 billion has been delivered through the program. As an indication of its success, approximately 150,000 producers have joined for the 2005 program year. By participating in CAIS, they are protecting $10.6 billion in reference margins.

While CAIS has been providing significant assistance to producers, it is clear that there are areas where program design and delivery can be better. Improving the CAIS program has been a key focus for both federal and provincial ministers of agriculture at recent meetings and a number of important changes have been made to the program as a result.

Input and advice from producers and their organizations has been invaluable as we work on changes to the program. The National CAIS Committee (NCC) was established in April 2005 and formally brings the views of producers to the table in discussions about program design and delivery. The NCC has proven to be highly effective. The committee includes 22 producer representatives and 15 officials representing both levels of government. Producer input on program changes has also been provided through national and provincial advisory committees.

Changes to the CAIS program began in the spring of 2004. These included providing coverage for negative margins, increasing the payment cap and lowering the amount of the deposit requirement. Negative margins occur when producers' eligible expenses are greater than their eligible incomes under the program. Many cattle producers found themselves in this situation when the border was closed as a result of BSE. As well, the program payment cap has been increased from $975,000 to $3 million to reflect the change in size of farming operations in recent years.

In addition, deadlines were extended for the 2003 and 2004 CAIS program to ensure that producers had enough time to learn about the new program and to take the necessary steps to participate.

In July, ministers of agriculture responded to concerns about the deposit requirement for participation in the program by agreeing in principle to eliminate it and replace it with a fee. This addresses producer concerns about affordability and tying up working capital. In the meantime, the program has been changed so that producers can withdraw all the funds in their CAIS accounts. This has provided significant cash flow for producers, who had approximately $603 million in their accounts.

In addition to replacing the deposit with a fee, a number of other changes are currently under discussion and analysis. Targeted advance payments are being discussed which would deliver money more quickly to producers in an area experiencing a farm income disaster. Improvements to negative margin coverage, reference margins and how inventory is valued under the program are also being discussed. Ensuring there is a strong link between CAIS and Production Insurance is important. The best mechanisms for ensuring these programs complement rather than compete with each other are under discussion. Finally, simplifying the program and improving delivery are a priority.

There is still work to be done to improve CAIS design and delivery, but based on the results so far, and through the ongoing collaboration between government sand producers, I remain optimistic that CAIS will continue to evolve as a program that meets producers' needs when their incomes are negatively impacted by events beyond their control.

Contact Information

  • Agriculture and Agri-Food Canada, Ottawa
    Media Relations
    (613) 759-7972 or 1-866-345-7972