(a) AIDA is a whole farm program so that support is not provided on a commodity basis. Data is not available on gross margins by commodity produced.
(b) AIDA provides a common basis of support for all commodities. There is no evidence to suggest that any commodities groups are being treated inequitably based on eligible versus ineligible expenses. Larger farms whether grain, tree fruits or other commodities would tend to have larger margins in dollar terms than smaller farms producing the same commodities. However, it is not the absolute size of the margin but the variation in the margins between the reference period and the claim year that triggers an AIDA payment.
(c) Depending on the trend in the margins, AIDA can make payments continuously to bring farms up to 70% of the previous three year average. In the sense that AIDA payments can be triggered in periods where margins are declining, the program can work in back to back below average return years. However. the level of payment will reflect the historical margins. In 1999 producers will be able to choose a reference period on which to base their payments, either the previous three years, or three of the previous five years, not counting the high and low income years. This will help to maintain their reference period margins as one of the low margin years can be dropped from the support calculations.
(d) There is no evidence that ignoring negative margins in the reference period would have a significant impact on program payments versus the current design where negative margins are included in the reference period. Raising negative margins to zero in the reference period would be contrary to World Trade Organization, WTO, guidelines governing green programs and leave Canada open to trade action by our trading partners.
On november 4, 1999, the Government of Canada announced that it is making a further $ 170 million available to cover negative margins under AIDA across the country. A good portion of farmers' negative margins will now be covered for both years of the program, 1998 and 1999. Along with allowing producers to choose a reference period another change will ensure that family and non-family labour are treated the same in calculating eligibility for 1999. These changes mean that a potential $1.07 billion in federal funding will be available to help farmers through two years of low international commodity prices and adverse weather. The changes are consistent with the advice received from the national safety nets advisory committee.
(e) AIDA is not intended to provide support for producers until their plants mature and produce a reasonable yield. A producer must be able to finance the period when plants are not producing. AIDA will only cover the portion of the farm that is in production, but as with all other commodities it will provide payments when income falls dramatically. While perennial crops limit flexibility, this is also true of those who have little flexibility in the mix of their annual crops and it is true for those with large investments in specialized livestock facilities.
*Question No. 47—