NCFA believes the AgriStability program is an important program that should be maintained, simplified, and improved.
Our members have indicated that they like the cattle price insurance program that has been piloted in Alberta. It has been easy to use, but it has a critical flaw. It has future payouts based on historical data. In a volatile market, this simply doesn't work.
AFSC has completed a couple of studies of this program, which are due to be released in January. NCFA recommends that the federal government work with the provinces to implement a margin-based insurance program that can operate across western Canada. We believe the results of the AFSC study will be fairly clear on how this program can work effectively under the umbrella of the AgriStability program.
We believe the AgriRecovery program needs to be maintained and improved to cover catastrophic losses, both market loss and weather events. In terms of caps, NCFA recommends that we go to a sliding scale approach to program eligibility. For example, everyone who qualifies for a program receives the same payout on the first $2 million of gross revenue. For those who have gross revenue of between $2 million and $6 million, there is a lower rate of compensation on a per unit of production basis. And for those with revenues over $6 million, the compensation per unit would be less again.
This type of system recognizes the contribution of all producers, regardless of size, and provides everyone who qualifies with a hand up when they need it most. It also recognizes that efficiencies gained as you get bigger don't necessarily cost as much in terms of loss.
Regarding AgriInvest, the NCFA members recognize the value of spreading a topping across the cake, but this money could be better utilized within each commodity. NCFA recommends that dollars spent on this program be reassigned to better reflect the changing demographics of the agriculture community and the specific needs within each sector.
In the beef industry, we are very supportive of the government's efforts to open new offshore markets for our beef products. However, while it is great to open new markets, it is an entirely different set of criteria needed to deliver the right product—cut and wrapped the right way—at the right time.
The NCFA sees the offshore doors starting to open and recognizes this opportunity as the best risk management program they could pursue. But like the oil sands companies, the beef industry needs to develop the pipeline: the infrastructure required to meet the specific needs of the new niche markets. While there will be value in these markets, they will need to be developed over time and will require significant investment in both human resources and nuts and bolts infrastructure.
The NCFA recommends that the federal government plan to partner in this development. This would be a good way to redirect the AgriInvest portfolio.