Ontario’s Risk Management Plan Is Solid: Political Fireworks Ahead
Should we claim victory? What you say? For Ontario farmers getting their proposed risk management program on the front burner cannot be interpreted any other way. It is here after a long hard fight. Why its here I don’t know. After fighting for it for years, I find it hard to believe RMP is being given the light of day by the same people who denied it so long.
I guess it’s a case of letting what you see in the rear view mirror go. That’s hard for me because politics is fickle at the best of times. What’s happened to our safety net over the last few years was deliberate. From a political perspective stupidity and ignorance was involved. That’s part of what made it easy for me to stand up and fight back. However, now that RMP is here maybe it’s finally time to let those feelings go. Lessons have been learned the hard way.
There surely will be critics of RMP like there is of almost every agricultural safety net. This coming week I’ll be attending one of the information meetings specifically to absorb the nuances of the new program. In my mind at this early stage there is a lot right about the program. There are some things wrong too. The real stinker is the lack of federal support. Linkage to Agristability doesn’t quite add up. I’ll be writing more on that later.
The following point form report comes from Peter Tuinema of the Ontario Wheat Board broadcast over the Blackburn Farm Radio network, which is the home of my weekly radio commentary.
- It’s a 3 years test pilot and if you sign up for the first year, you have to be enrolled in all three years.
-You also need to be enrolled in production insurance and CAIS’s replacement — AgriStability.
- Looking at the 3 major crops — corn’s support prices range from 3.33-4.08
– soybeans 8.44-9.19 and winter wheat — 3.96-4.71.
- Your premium on that is 30% of the difference between your chosen support price, and the long-term average price per commodity.
- Now because at this point you’ll only get 40% of your payout — you only have to pay 40% of the premium.
- There are also caps — with the total amount you’ll be able to collect being 390 thousand dollars per year.
- If the federal government climbs on board — that increases to 975 thousand dollars.
(Blackburn Farm Radio Ontario)
When you first look at that report its positive. Obviously, there will be cash flow consideration with regard to premiums. It was the same in the “old days” when farmers across Canada had to write “GRIP cheques.” That was soon changed in Ontario where the premium was deducted from any eventual payouts. Caps may be a problem for some producers. The link to Agristability is more a vestige of a federal government, which can’t shake CAIS. That will change when Chuck Strahl realizes his folly or he’s voted out of office. Margin based farm programs are politician killers. The bizarre part of that is they usually are the last to find out.
The federal stance with RMP is a big problem. It’s almost comical. Last year Regan Butler of Croton Ontario was snapping pictures at the April 6th farm rally in Ottawa. I was lucky because I obviously couldn’t take any stage pictures and she shared them with me. One pictured showed the stage with a sign clearly saying “Hey Chuck Strahl, ask Leona to dance.” It was an obvious reference to the Ontario minister’s reluctance to sign onto RMP at the time and Strahl’s frustration with her. Now, it’s reversed. She’s dancing up a storm and Strahl is more akin to the guy in high school who can’t dance. Of course farmers would be much happier if they just started to tango.
We’ll see who shakes a leg first. It also might get very political because the Conservatives have a problem. Saying you don’t support RMP in Ontario is political suicide for rural Conservative MP’s who got elected on a wave of farm protest in 2006. Combine that with last week’s court decision by Judge Dolares Hansen which cancelled regulations passed by order of council that would remove barley from the exclusive marketing authority of the Canadian Wheat Board and you have the prospect of some Conservative losses in rural Canada next time around. With the precarious arithmetic keeping Stephen Harper’s Conservative’s in power it wouldn’t take much. Rural seats going to the Liberals would have them back in power in short order.
However, aren’t we talking about a program to manage price risk when it comes to RMP? You bet we are. Nonetheless, the path to agricultural economic nirvana with a bulletproof safety net is lined with political potholes and roadblocks. Farmers claiming victory over RMP might be premature. However, it’s definitely an improvement from where we’ve been. The challenge will be to keep the pressure up to finish the job.