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Drought tests Canadian Agricultural Partnership

Municipalities have declared an agricultural state of emergency. Here are the Canadian Agricultural Partnership plans: AgriStability and AgriRecovery

In a dry year a rain will boost your spirits, but for farmers in this region it’s bittersweet. Anything that will bring on the grass and help crops fill is welcome, but the truth is, recent rains are far too little and too late for all kinds of crops. In times like these, producers need help.

At their July 27 meeting the Wallace-Woodworth council addressed the issue. In brief their resolution stated: “drought conditions greatly reduced viable grazing locations, available forage, and feed for livestock leading to financial challenges for farmers needing to drill additional wells; find alternative and more expensive sources of livestock feed; and being forced to reduce livestock numbers early in the season.” The resolution to declare a state of agricultural emergency was passed and included a request for “immediate assistance from the Government of Canada, Province of Manitoba, and Department of Agriculture through cost recovery programs that will benefit farmers.”

The Canadian Agricultural Partnership (CAP) is an association of provincial and federal governments to support financial stability in the agricultural sector of our economy. It consists of a suite of programs, jointly funded, designed to do just that.

AgriStability is a margin-based program that provides support when farmers experience larger income losses. As stated in a press release this week, “The governments of Canada and Manitoba have agreed to increase the 2021 AgriStability interim benefit payment percentage from 50 per cent to 75 per cent for Manitoba producers.” This will allow eligible producers to get a bigger portion of their stabilization payment this summer. The governments have agreed to allow late entry for producers that want to join the program. They will also ensure that lost production from drought does not affect their level of support in years to come.

The AgriStability measures may be suited to more normal times, whatever that is, but in the crisis facing producers now, they aren’t enough. The federal government has indicated that farmers who sell off all or part of their herd will be allowed to offset that taxable income with purchases of breeding stock to rebuild.

The AgriRecovery framework is activated in disaster situations. It is not actually a program but a framework to assess the costs of the disaster and to provide assistance with any expenses needed to recover. AgriRecovery initiatives are typically joint programs administered by the provincial government. Initiatives are typically cost-shared on a 60:40 basis between federal and provincial governments, respectively. This week, the federal government announced that they had completed the preliminary assessment of the disaster and were activating the AgriRecovery framework with an initial contribution of $100M.

Manitoba announced it “will invest $62 million in programs under the AgriRecovery framework that will be designed to support livestock producers affected by this year’s drought conditions, to ensure producers have options to retain and care for their animals while also supporting the longer-term sustainability of the livestock sector.”

Farm organizations have been quick to respond. Keystone Agricultural Producers (KAP) and Manitoba Beef Producers (MBP) both expressed approval of the move to activate the AgriRecovery framework, but noted this is a first step and more help will be needed.

MBP is seeking an immediate per head payment program to allow individual producers to make management decisions best suited to their particular operation. They say a long term program is also needed to address the situation where farmers are forced to sell breeding stock at depressed cull cow prices and buy breeding stock to rebuild at inflated prices.