Federal, Provincial and Territorial (FPT) Agriculture ministers met in Whitehorse on September 12-14, 2012 and reached an agreement on Growing Forward 2 (GF2) - the new 5-year agricultural policy framework which will come into effect on April 1, 2013. The governments’ news release details specific changes reached in the agreement.
Prior to the negotiations, CFIB released its report, Fostering Ag Competitiveness, which outlines our farm members’ priorities for GF2 to improve the agriculture sectors’ overall competitiveness. Our agri-business owners indicated regulatory reform (72%), reducing the total tax burden (68%), improving market access for Canadian agricultural products (66%), increasing focus on research, development and innovation (45%) and designing more responsive Business Risk Management (BRM) programs (42%) are top priorities for government action.
We also heard that federal and provincial governments were considering significant changes to AgriStablity and AgriInvest programs. Just prior to the Ag ministers’ meeting in September, CFIB sent a letter to Ag ministers raising our members’ outstanding questions and concerns regarding proposed changes to various BRM programs and the impact on producers across Canada.
Key highlights of Growing Forward 2:
- Funding for strategic initiatives (non-BRM) – approximately $3 billion over 5 years, including a 50% increase in funding for cost-shared initiatives like research, infrastructure and market development.
- Reductions to AgriStability
- 70% Margin Coverage - Reduced trigger from 85 to 70 per cent of producer’s reference margin. The AgriStability fee will be reduced accordingly.
- Harmonized Compensation Rates - movement to a flat payment rate (70%) from a tiered system (80% to 60%).
- Limited reference margins – reference margins will be limited to the lower of their historical reference margin or allowable expenses reported in previous years.
- Reductions to AgriInvest
- Reduced matching government contributions from 1.5 to 1 per cent of producers’ Allowable Net Sales (ANS) from $22,500 down to $15,000 for producers to invest in their business. However, producers will be able to contribute up to 100% of their ANS annually and up to 400% of ANS in total so that producers can better use AgriInvest as a risk management tool.
CFIB has mixed views of GF2 – welcoming the focus on research, innovation and market development, but has outstanding questions regarding how the changes to BRM programs will affect farmers. Our agri-business members have consistently called for more responsive, transparent, accessible, predictable, and timely BRM programs. BRM tools are a last resort, but when producers need them they have to work.
Given our outstanding questions, CFIB is pleased governments have committed to a mid-term review of BRM programs, as we hope this will ensure the changes resulting from GF2 will foster entrepreneurship, growth, diversification, and continued production of high-quality food for consumers.
If you have any further questions, please contact a Business Resources Counsellor at 1 888-234-2232 or email.