Local producers question return from agricultural changes for 2013

Agriculture Financial Services Corporation has announced imminent changes to its AgriStability and AgriInvest programs

Agriculture Financial Services Corporation has announced imminent changes to its AgriStability and AgriInvest programs, and not all producers are happy with the 2013 plans.

“We are never gonna see any money,” Big Valley farmer Albert Schermers said last week.

AFSC customer service advocate Robert Forsstrom told agricultural producers at an information session in Stettler last Thursday that the new program parameters would be in place by April 1.

The federally administered AgriStability’s Growing Forward five-year program is set to expire March 31.

To replace that strategy, federal, provincial and territorial ministers of agriculture have reached an agreement on a five-year Growing Forward 2 policy framework.

Forsstrom said the revised program isn’t designed to respond to reduced profit situations, but it’s positioned to assist with “true disaster situations.”

He said producers would be more responsible for normal risk. “They can reduce their risk by utilizing the insurance programs.”

Under the old program, a payment was triggered when a producer’s margin (allowable revenue, less allowable expenses) dropped 15 per cent below his average margin from previous years (historical reference margin).

Starting in the 2013 program year, governments plan to provide assistance when a producer’s margin falls 30 per cent below his historical reference margin.

Harmonized compensation rates, based on same-level government support, replace the tier-system on which previous payments were based.

Growing Forward 2 will be assessed after two and a half years, Forsstrom said.

Changes are also forthcoming for AgriInvest.

AgriInvest is a self-managed producer-government savings account that allows producers to set money aside that can then be used to help risk-manage small-income shortfalls, or to make investments to reduce on-farm risks. Producers continue to have the flexibility to withdraw funds at any time throughout the year.

Under the new agreement, producers can deposit up to one per cent (instead of the previous 1.5 per cent) of their allowable net sales each year into an AgriInvest account and receive a matching government contribution. The limit on matching government contributions would be reduced to $15,000 a year, from the current $22,500.

Forsstrom said balancing fiscal requirements of the federal government prompted the changes.

He said governments would work to evaluate and implement new insurance-based products.

Money is made available for research, development and administration for new products, Forsstrom said.