Thank you, Andre.
Thank you, committee members.
I will quote a very recent research paper from Kerri Holland at the University of Calgary's Simpson Centre for Agriculture and Food Innovation. In her report entitled “Canada's Food Security During the COVID-19 Pandemic”, she states:
As the foundation of the food supply chain, Canadian farmers are key to its stability. As many farms were experiencing severe economic hardship prior to the pandemic, the challenges of market uncertainty and increased production costs put these operations at greater financial risk. Policy action will be key to ensure the short and long-term viability of our primary industry and maintain the capacity to meet domestic and export market demands.
We could not agree more. This is why immediate action to reform Canada's business risk management programs is so critical and why we, along with many other industry associations that have appeared before the committee, are calling for immediate changes to AgriStability. Losses must be covered starting at 85%, and the reference margin limits should be removed.
Our friends at the Canadian Canola Growers Association have worked with Meyers Norris Penny to create a model farm in Saskatchewan, which is based on actual prices and yield averages, to analyze the impact of triggering AgriStability under the current scenario and under the model that we are proposing. I will quickly summarize the findings to help you better understand why the difference between 70% and 85% is so important.
Under the model, this farm lost just under $130,000 in 2019. Under the current system, AgriStability would be triggered and there would be a payment of $31,000, meaning a loss of nearly $100,000 for this farm. Under the changes that we are proposing, there would be a payment of $111,000, meaning a loss of only $20,000. This is on top of over $76,000 in 2018 under the existing 70% coverage.
I'm highlighting this to show you why that 15% difference in coverage means that income is actually stabilized. It still results in a loss of $20,000 in 2019, which of course isn't ideal, but it's manageable. Losses of $100,000 year over year are simply not sustainable.
A functional AgriStability program keeps farms afloat during difficult times, whereas the current system does not. That needs to change.
In closing, I know that members of the committee want to support Canadian agriculture. They can do this by making these simple changes to the AgriStability program, which will not only support our entire industry and value chain but also strengthen the Canadian economy. The federal government needs to take a leadership role in this area, not just to work with the provinces but also to take decisive action to achieve immediate results. If governments do not want to be responsible for letting any Canadian farms fail, especially when many sectors have aligned to tell governments exactly what our industry needs right now in terms of support, this is the best opportunity that we have.
We are counting on your support to achieve these necessary policy changes for this growing season.
Thank you.