Business Risk Management

Canadian agriculture is an essential part of the economic, political and social fabric of Canada. As a core driver of the Canadian economy, agriculture contributes to the well-being of both rural and urban communities as a key generator of Canadian jobs in rural and urban communities across Canada and as a leader in Canadian productivity growth.

Agriculture is a high-risk business that faces volatile prices, unpredictable weather, and a global market influenced by government supports to competing producers in other countries. In order to maintain its economic growth and continued innovation, Canadian agriculture must have a stable economic foundation from which to address shifting global and domestic market opportunities. For those risks that cannot be addressed through on-farm management practices, access to effective risk management programs provides Canadian producers with the income stability they need to continue investing in innovative technologies, to adapt to evolving market demands, and maintain long-term economic growth.

Canadian producers continue to focus on maximizing their income from the marketplace. The ongoing investment needed to maintain an adaptable agriculture industry requires an effective, credible suite of Business Risk Management programs that manages the effects of short-term volatility in weather and markets through bankable and timely programs. These programs must comply with WTO agreements, limit the risk of countervail from international competitors, but first and foremost, they must provide the predictable support needed to maintain a vibrant agriculture industry and healthy rural communities.

The Canadian government continues to erode its investment in the suite of Business Risk Management programs to the detriment of producers as world markets are becoming increasing more volatile and unpredictable.

OSF recommends:
• Effective production insurance for commodities that are not adequately covered by traditional crop insurance
• AgriStability cannot be limited to providing disaster support and must provide funding on a timely basis to ensure that the short-term impacts of significant income losses are mitigated. In addition, AgriStability payments must be calculated in a transparent and straightforward fashion that allows producers to predict and bank upon impending payments.
• Enhance support and capacity within the AgriInvest program to provide a platform to facilitate market-based adjustments and proactive investments in risk mitigation. The AgriInvest program must match producer contributions up to 1.5% of allowable net sales and the government-matched contribution limit must also be amended to allow for matchable annual contributions up to $100,000.
• The AgriRecocery framework must define clear and precise rules such that it can respond quickly to exceptional events and take into account all losses not covered by programs such as AgriStability and AgrIinsurance.