Hello. I welcome the opportunity to speak to the House of Commons Standing Committee on Agriculture with respect to business risk management programs.
I have a joint Ph.D. in economics and statistics. I've been a professor at the University of Guelph since 2009. Prior to Guelph, I was professor and chair at the University of Arizona from 1996 to 2009 and worked closely with the United States Department of Agriculture's risk management agency on various crop insurance issues.
Today I will highlight some of the points made in my written brief titled “Canadian BRM: A Study in Syntax and Mythical Changes”. That brief raised a number of questions in regard to BRM and producer efficiency, overall program funding, program equity, risk smoothing, alternative insurance schemes and actuarial soundness. Additionally, the recommendations from the most recent national BRM expert panel were reviewed. Finally, other areas discussed included cross-compliance, involvement of private insurers, provincial Crown corporations, subsidization and the use of artificial intelligence in BRM.
Very little has structurally changed in Canadian BRM programs over the past three decades. This is not an indictment of the program. A cursory look at agricultural trade numbers suggests that Canadian farmers are competitive internationally in almost all products. In 2017, Canada produced $110 billion in agriculture and agri-food products and exported $56 billion. It would be hard to argue that Canadian BRM programs have hindered the competitive position of Canadian farmers. Moreover, it is noteworthy that the average farm household has significantly greater income than the average non-farm household and four times greater assets.
BRM programs consist of AgriInvest, AgriInsurance, AgriStability and AgriRecovery. More recently, there has been a great deal of dissatisfaction with AgriStability as represented by significant declines in participation and also by what the speakers before me just said. This dissatisfaction is, in my opinion, solely because of the pronounced and significant decline in loss coverage since Growing Forward. I want to reiterate that, while the change in AgriStability program parameters from 85% to 70% may seem relatively minor, they are not. Decreasing the level of coverage from 85% to 70% may, in some cases, reduce loss coverage for some farmers upwards of 100%.