(a) Agricultural income disaster assistance, AIDA, provides a common basis of support to all commodities. The British Columbia whole farm income insurance program, which essentially follows the same rules as AIDA, has provided payments in different regions of the province where different commodities predominate. This reflects the fact that the gross margin can vary as much from farm to farm producing the same commodities as between farms producing differing commodities.
(b) An AIDA payment is trigerred by a change in a farmer's gross margin. Adding a particular expense would have a small effect on the AIDA payment, up or down depending on the producer, because it needs to be done for both the reference period and the claim year.
(c) A recent evaluation of the Alberta farm income disaster program stated that the program payments have been concentrated in areas with the largest decrease in farm incomes and that it responds well to back to back disaster years. The impact of back to back years of below average returns will depend on the magnitude of the decline in the margins.
In any case, AIDA is designed to address extreme, short term income declines; it is not the program's purpose to support income in a manner that is not consistent with each farm's recent experience.
(d) Data are not available to show the impact on AIDA of altering negative margins in the reference period. Artificially increasing past income would raise the possibility of trade actions as this would conflict with international guidelines.
(e) The British Columbia whole farm income insurance program has provided payments in different regions of the province where different commodities predominate. Besides farmers who have planted perennial crops such as tree fruits, farmers who have invested in essentially single purpose equipment or buildings such as hog barns will also have difficulty in switching to other commodities. These farms can be subject to high market risks because their revenue is related to the price of one commodity. These farmers should utilize all tools available to them to mitigate these risks. These include the use of government programs such as net income stabilization account and crop insurance. Producers must also look for ways to mitigate risks beyond utilization of government programs.