Why do we believe safety nets are needed? Safety nets provide producers with stability from the highly variable commodity markets that we've been witnessing over a number of past years, especially with a commodity like soybeans, for which the market has been declining steadily. Since last year, prices have improved slightly.
Globally, farmers have access to different sets of tools to manage risk associated with production. We're not asking for anything new; every country has them. Canadian producers need a set of tools similar to those held by American producers in order to help them compete. That's especially true in our soybean industry, where we have NAFTA and WTO rules. We have an open border with the U.S., and our prices were based on a declining U.S. price in the past. That price wasn't what the producers in the U.S. got; it was their export price. The American producers were subsidized on top of that, and we as an industry have had to compete against that, farmer to farmer.
Some provinces have very good regional programs that have worked for their producers. In Quebec they have ASRA. In Alberta they have the spring price endorsement program.
On past and current safety nets for Ontario, prior to 2003 each province negotiated different programs with the federal government to meet the needs of its farmers. In Ontario we had the market revenue insurance program, net income stabilization assistance, and crop insurance. It's interesting to see that there's a proposal to bring back NISA, but that's only part of the solution for the overall farm part.
After 2003, federal policy changed to two national safety programs: CAIS and production insurance. As stated earlier, CAIS does not work for a program such as our soybeans, corn, and wheat in Ontario. Specifically for soybeans here, the production insurance part of our crop insurance program works reasonably well.
In terms of current issues in safety nets, CAIS is not working for Canadian growers. This is mainly due to timeliness of payments based on income tax. This can be up to a year after the hurt is registered, and we're then still waiting for payments.
CAIS is not commodity specific. We need flexibility in our programs so that we can mitigate risk.
CAIS has the offsetting of losses in other segments of a farm's operations. If farmers in Ontario, Quebec, or Manitoba have attempted to diversify, they are punished because of whole-farm income.
There are long-term declining reference margins. Another problem with it is the difficulty in predicting a payment. As a matter of fact, there's no way anybody can predict a payment in this program.
What programs have worked for us? Basically, the commodity-specific types of programs have. Prior to 2003, Ontario had market revenue program production insurance. It worked well because it was regionally specific. It accounted for differences in crops and markets. The market for our soybean crops tended to work north and south. We're not east-west, and we're different from canola. We're linked here with the U.S. production.
Soybeans in Canada are export neutral. We don't import and we don't export. Our price is basically the U.S. export price, as I stated earlier, and the U.S. farmers get subsidies. We have to be treated equally in order for our industry to compete in the long term. We need the commodity-specific programs so that they provide our producers with flexibility.
Safety nets are a bridge for producers as the market develops further. A prime example that we're seeing right now is the ethanol industry in the United States and the positive impact it's having on the market. There are many opportunities in market development that can help our industry in the future.
I'll turn it over to Jim.