While provincial agriculture minsters are reviewing Ag Minister Marie-Claude Bibeau’s business risk management proposal, the Canadian beef industry sees potential in the offer. The beef industry has been pushing for removal of the reference margin, changes to the trigger/compensation percentages, and raising the payment cap limit. The proposed deal includes some — but not all — of the beef industry’s asks.
In a Canadian Cattlemen’s Association press release, Bob Lowe, CCA president, says that “With significant COVID-19 induced market volatility, in addition to typical risks like weather, trade and production, well-designed and sufficiently funded business risk management tools have never been more critical for cattle producers… The proposed program enhancements would better position our industry to contribute to Canada’s economic recovery in a meaningful way.”
In the meantime, Brady Stadnicki, manager of policy and programs with CCA says that over the next few weeks CCA will continue to discuss the proposal with the federal government, and that “provincial cattle associations are working with their Ministers to garner support for the proposal.”
Arnold Balicki, chair of the Saskatchewan Cattlemen’s Association says, “We really hope that [Saskatchewan] Minster Marit accepts this deal because this deal is a move in the right direction.”
Removing the reference margin was pushed heavily by the cow-calf sector, while raising the payment cap was important for the feed yard sector.
Canada’s beef producers have advocated that removing the reference margin limit (RM) under AgriStability is an effective program amendment to narrow the equity gap amongst agriculture sectors. Since the introduction of the RML, program year margins are calculated on the lower of historical reference margin or average eligible expenses (using an Olympic average). The cow-calf sector typically is made up of lower cost business structures, as they usually produce their own feed and have little non arms-length labour, which means many operations have their reference margins limited.
Stadnicki adds, “CCA has found that cow-calf operators that have reference margin limiting applied require an extensive drop in their program year revenue to trigger support from AgriStability.” This has reduced the responsiveness of the program and led to decreased participation over the last six to seven years, he says, and that removing the RML will help “level the playing field for cow-calf producers and go a long way in making the program predictable, bankable and ultimately more equitable for the cow-calf sector.”
Both the Saskatchewan and Alberta Cattle Feeders Association were disappointed that the AgriStability payment cap was not raised from $3 million to $10 million and will continue to push for that change.
While the Alberta and Manitoba ministers have pushed for more focus on the 2023 framework than fixing the current program, the beef industry seems to disagree. Balicki feels that just leaving the current plan as is would be a mistake as “waiting two years is a really long time.”