CAIS Alive and Well After Agriculture Ministers Meet on “The Rock”

I’ve never been to “the Rock”.  For my American readers that means our most eastern province Newfoundland and Labrador.  Last week Canada’s federal, provincial and territorial met in St. John’s Newfoundland.  They met to discuss once again the future of Canadian agriculture.  For Canadian farmers, the meeting on the Rock last week holds some clues to what is going to happen in our immediate future.

For grains and oilseed farmers currently enduring some of the worse
times in decades a little support from this meeting would sure suffice.
At the meeting the ministers agreed to work toward separating “disaster
assistance” from “income stabilization.”  In Canadian farm country this
was a no-brainer.  Unfortunately it has taken years and a change of
government for our agricultural mandarins to realize that.

The following is a direct quote from the final communiqué from the
Newfoundland meeting.

“In moving towards separating catastrophic disaster assistance from
income stabilization, Ministers further agreed they will take the steps
necessary to implement a new margin-based system that will build on the
proven elements of existing business risk management programming, while
incorporating recommendations for change put forward by industry, and
considering affordability. Among changes agreed upon for this new
margin-based program are: an improved P1/P2 inventory valuation method
that will make the program more predictable and responsive; expanded
coverage that provides better support to more producers with negative
reference margins; and better interim and targeted advances, again
improving timeliness and responsiveness to producers in need.
While recognizing that margin-based programs can be complex, they re-
emphasized the importance of responding to producer needs with
programming that is easily accessible as well as predictable, and

You might wonder what this is all about?  Reading through this
you’ll read margin over and over again.  What this means is that these
ministers of agriculture and their mandarins are about to put lipstick
on a pig.  CAIS is not only alive it is getting new life.  The word
“margin” means that there will be no RMP in Ontario or any other place
other than Quebec.  It’s CAIS II or son of CAIS.  This is an
agricultural policy direction, which is a disaster.  Farmers will pay.
Rural politicians will lose their seats over it.

This is a tough one.  The changes that were announced by Chuck
Strahl after the federal budget were meant to improve CAIS for this
year.  As I have described in past columns the inventory changes he made
should make a difference in CAIS payouts for 2005 retroactive back to
2003.  Payments will be capped.  The problem with this latest weekend on
the rock is they have enshrined this same type of system into the
future.  There is no way it can work.

After the meeting federal and provincial ministers jetted off to
Geneva Switzerland to attend the WTO meeting.  This meeting is just
another where trading nations will try to enact some of the changes of
the Doha round by December 2006.

Canadian grains and oilseed producers might wonder what they need
to go there for.  Expanding out into the world market is just
legitimizing a corrupt market environment.  However, I think Canada’s
supply management farmers have a real stake in preserving what they have
built.  So our ministers go.  Explaining what I think will be the future
sell out of supply management will surely make them squirm.

Or maybe they don’t even know.  Sometimes I get that feeling
especially watching the provincial minister in Ontario Leona Dombrowsky.
She is a very diligent politician.  She has shown guts especially when
she shred a stage with me on Feb 14, 2006 in front of 1 Stone Rd in
Guelph Ontario.  However, she does not support any Risk Management
Policy for Ontario agriculture.  Her agricultural mandarins sent to St.
John’s last week signed on to the future “son of CAIS” program.  This is
political suicide for Liberal MPPs in rural Ontario.  However, an even
greater sin is it is bad “agricultural economics.”

Over the last few years I have had many opportunities to consider
what’s going on within our Canadian agricultural policy world.  I have
watched as governments cut programs like NISA and MRI and gone over to
margin based programs like CAIS.  At one time I thought it was purely
political.  You chase out the Liberals and shazzam, anybody with two
agricultural economic brains to knock together would end margins based
programs like CAIS.  Clearly I was wrong in that estimation.  The
Conservatives are walking down that same road.

The question is why?  Is the collective agricultural bureaucracy in
Ottawa and the provincial capitals married to a CAIS like “margins”
stabilization program that they can’t change?  Is OMAFRA in Ontario
biased against the RMP?  Is it a fairy tale as one OMAFRA mandarin once
told me?

It’s hard to say.  Clearly though, there is much work to do.  St.
John’s Newfoundland last week was a big set back for Canadian farmers.
Something needs to be done.  But sitting on “the Rock” and musing about
a better CAIS is a road to nowhere.