Farmers' cash-flow needs being addressed

Archived Release

Farmers' cash-flow needs being addressed

Income Stabilization and Risk Management Programs Will Provide Relief TORONTO, Nov. 22 - The Ontario and federal governments are addressing the immediate financial needs of the agricultural sector by providing up to $188 million to help stabilize the industry and give relief to farmers, Minister of Agriculture and Food Steve Peters announced today. "Ontario relies on a strong and vibrant agricultural sector," said Peters. "This support will make our farmers more competitive, while helping them with short-term cash flow problems as they continue to deal with the fallout from BSE." This support comes in two forms: $172 million over the next three years in business risk management programs under the Agricultural Policy Framework, and up to $16 million in interim payments for BSE repositioning as part of the Canadian Agricultural Income Stabilization program. "These two initiatives will help us with our long-term approach to income stability and better position our agricultural sector to compete globally," said Peters, adding that when these BSE initiatives are considered with other government set-aside programs, farmers can gain as much as $100 million. "This is good news for farmers, good news for the Ontario agricultural sector and good news for strong rural communities and a quality of life that is second to none." Backgrounder ------------------------------------------------------------------------- November 22, 2004 NATIONAL BSE REPOSITIONING STRATEGY On September 10, 2004, the federal government announced a $488 million strategy to reposition Canada's livestock industry in the face of continuing border closures and market disruptions as a result of the May 2003 discovery of Bovine Spongiform Encephalopathy in an Alberta cattle herd. Developed in concert with the cattle industry, the strategy is designed to address the short-term financial needs in the livestock sector while repositioning the industry for the longer-term by lessening its dependence on export markets. Initiatives include: - Facilitating an increase in abattoir capacity; - Sustaining the industry until the increased capacity comes on stream; - Dealing with older cows; - Providing cash flow assistance; - Finding new markets for Canadian meat; and, - Re-opening the U.S. border. Ontario had already taken steps to increase its abattoir capacity and to develop new markets for Ontario meat products, through the $10 million Cull Animal Strategy, announced in February 2004. On September 27, 2004, the Premier of Ontario announced that the province would provide up to $30 million towards two set-aside programs. The Fed Cattle Set-Aside and the Feeder Cattle Set-Aside are designed to encourage cattle producers to hold animals back from market by providing funds to offset the costs of feeding the animals over a longer period. The Premier also indicated that the Ontario government would find the funds necessary to provide cash flow assistance, through interim payments under the Canadian Agricultural Income Assistance (CAIS) program. Ontario's share of this initiative is estimated to be $16 million. Cash flow has been identified by the industry as a serious issue for many producers. This initiative is especially important to sheep and other ruminant livestock producers, who have also experienced declines in their income. Backgrounder ------------------------------------------------------------------------- November 22, 2004 BUSINESS RISK MANAGEMENT FRAMEWORK Ontario's Companion Programs In the past, federal-provincial business risk management frameworks have included province-specific initiatives, known as companion programs, to address the unique needs and priorities of each province's agriculture sector. The Agricultural Policy Framework includes two national business risk management programs, the Canadian Agricultural Income Stabilization program and production insurance. Federal and provincial governments recognized that producers would more easily make the transition to a long-term approach to income stability if there were a transition period, during which the province-specific programs could continue to be provided, with the understanding that they would ultimately be phased out. Ontario's companion programs include: - Self-Directed Risk Management, available to producers of horticultural crops as new and effective crop insurance options are developed - Plum Pox Virus financial assistance, targeted at the operators of tender fruit orchards who are working with the federal and provincial governments to eradicate this devastating disease - Wildlife Compensation, which compensates farmers when wolves, coyotes or bears kill or injure their livestock or poultry - General Top-Ups, available to all farmers who participate in the Canadian Agricultural Income Stabilization program and who experienced an income decline - Research and Development, which addresses ongoing and emerging needs in all sectors, such as field crops, horticulture or livestock. Ultimately, these programs will be replaced with an expanded production insurance program. The government is currently developing options in consultation with stakeholders, to ensure the risks currently covered by the companion programs continue to be effectively addressed. Disponible en fran├žais www.gov.on.ca/omafFor further information: Jamie Rilett, Minister Peters' Office, (416) 326-6439, (416) 458-2610 (Mobile)