Reference margin limit dropped for farmers and ranchers

By Jordan Parker

During an end-of-March meeting, Canada’s Prairie provinces discussed Agristability and some changes to the program, ultimately approving the removal of the reference margin limit.

“We asked for that removal because it allows more opportunity for payments to be triggered for producers. Cattle producers were having issues with plant closures due to COVID-19,” said Todd Lewis, President of the Agricultural Producers Association of Saskatchewan.

“They were selling cattle into a depressed market, and the feds and provinces agreed to remove the margin limit to help out.”

Lewis said it goes retroactively to 2020 for Agristability insurance payees, and it’s a huge improvement.

On the other end, however, the Prairie provinces asked the federal government to “provide their 60 per cent share of the cost to increase the compensation rate,” but this was denied.

“The producer groups in Western Canada were aligned on this, and disappointed funding wasn’t put up higher by the province”, said Lewis.

“The funding formula for the program is the feds do 60 per cent and the province does 40. We wanted the feds to pick up more for their share. This has been a place for a decade, but they didn’t want to change.”

Agristability allows producers to sign up and pay premiums, but Lewis said things haven’t really changed since 2013, leading to fewer than 40 per cent of producers being involved right now.

“It’s an imperfect program, though the changed help. But we have negotiations in 2023, and we want major changes. Farmers are voting with their feet, and aren’t signing up where they don’t see value.”

Saskatchewan Agriculture Minister David Marit provided information about the province’s thoughts on the program in a statement.

“Producers have expressed concerns about the timeliness and predictability of the AgriStability program. This (reference margin) change reduces the complexity of the program and adds certainty for the Saskatchewan agriculture industry. Producers and agri-businesses have made it clear that removing the RML will help the AgriStability program function as intended and make the program more effective and equitable,” he said.

He also spoke on the ask for the percentage changes in funding from the federal government.

“At the March 25 FPT meeting, the Prairie Provinces also proposed that the federal government provide their 60 per cent share of the cost to increase the compensation rate, while allowing the provinces flexibility in the level of funding that they can provide,” he said.

“A number of provinces supported this motion, representing the vast majority of Canada’s agricultural production. The federal government proceeded to withdraw their funding for the compensation rate change.

Saskatchewan is committed to providing support to our producers with this short-term change to AgriStability. Work continues with our FPT colleagues to evaluate long-term alternative options to the AgriStability program.”

PHOTO

David Marit