CFA wants business risk management reform

CFA wants business risk management reform
Jun 07, 2019

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By Jonathan Martin
Staff Writer


The Canadian Federation of Agriculture (CFA) is calling for reforms to Canada’s business risk management programs (BRMs).

Farmers use BRMs to manage risks that threaten the viability of their farms. Three programs are available:

  • AgriStability provides support when a farmer experiences a large margin decline.
  • AgriInvest provides cash flow to help farmers manage income declines.
  • AgriInsurance provides cost-shared insurance against natural hazards to reduce the financial impact of production or asset losses.

The CFA says that “immediate reforms to Canada's BRM program suite (is) needed to ensure (it is) responsive to the changing environment farmers face,” a Thursday release said. The CFA particularly highlighted the need for updates to AgriStability.

Canadian farmers have faced challenging conditions this year due to ongoing trade disputes, diseases and harsh weather. This year’s difficulties follow a 45.1 per cent drop in 2018’s net farm income.

“These disruptions are having real impacts right now on (farmers’) livelihoods and will only cause further damage the longer they persist,” the release said.

Specifically, CFA wants AgriStability’s margin coverage restored to 85 per cent and its reference margin limit eliminated.

Currently, AgriStability kicks in when a producer’s program year margin falls below 70 per cent of his or her average reference margin. A program year margin is the total of a producer’s allowable income minus his or her allowable expenses. A reference margin is calculated by taking the last five years of a producer’s margin, removing the highest and lowest margins within that period and averaging the remaining three.


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