Federal-Provincial-Territorial Meeting of Ministers of Agriculture

VICTORIA, B.C., Feb. 24, 1999 – The Government of Canada and participating provinces today confirmed that the pieces are now in place for the delivery of a national farm income disaster program. With full provincial participation, up to $1.5 billion could be available over two years.

At a two-day federal-provincial agriculture ministers meeting, nine provinces agreed in principle to participate in the Agricultural Income Disaster Assistance (AIDA) program, subject to provincial approval where necessary. Nova Scotia was not able to make a commitment at this time, but is continuing to work with the federal government toward participation.

The federal government is committing up to $900 million over two years. Under the 60:40 cost-sharing principle, the provincial contribution could add up to $600 million.

Since AIDA is a demand-driven program, the ultimate expenditures will depend on the extent of income problems over 1998 and 1999. The program has been designed to be consistent with Canada's international trade agreements. AIDA funds are in addition to the existing federal-provincial safety net agreements.

The program will take into account the Government of Canada's goal of treating all farmers fairly by ensuring that the federal share of the program is delivered under the same rules across the country. Current, similar provincial programs will guide delivery of the provincial share of AIDA.

The AIDA program will direct funding in the most efficient and effective way. It will assist family farm operations that have experienced drastic income declines due to circumstances beyond their control.

The program has been designed to be as inclusive as possible and will be open to all farmers in all commodities in all regions of Canada. In addition, the program will offer assistance to new or beginning farmers who will be eligible to apply despite the fact that they may not have all the historical information needed for the program calculations.

The program will use an individual producer's revenues and expense information from tax returns and will complement existing national safety net programs. The applicant's gross margin – the allowable revenues from all commodities minus allowable expenses – will be compared with the average from the three previous years to determine the amount of assistance available under AIDA. Payment to an eligible applicant will be calculated as the amount the applicant's gross margin for the year falls below 70 per cent.

Provinces already having a similar program in place, such as Alberta, Prince Edward Island, Quebec, Ontario and British Columbia, will process applications according to federally and provincially agreed-upon guidelines. The federal government will administer AIDA in Saskatchewan, Manitoba and Newfoundland. In New Brunswick, the provincial government will deliver AIDA funding in collaboration with the federal government.

During the two days, ministers also discussed a long-term federal-provincial safety net strategy. They continued their dialogue on options for the long-term renewal of the safety nets package, including detailed analyses of the effectiveness of existing safety net programs, and further development of models for allocating safety net funding. This will guide officials in preparing options and next steps for the annual ministers meeting in July.

Ministers also examined trade issues including the upcoming consultative conference on World Trade Organization negotiations which is scheduled to take place in Ottawa in April and the current status of the trade relationship between Canada and the U.S.

A report on Y2K readiness for the agriculture and agri-food sector was tabled by Agriculture and Agri-Food Canada. Ministers recognized the need for the sector to ensure its computer systems are Y2K compliant by Dec. 31, 1999.

The next minister's meeting will be held in Prince Albert, Saskatchewan, this July.

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BACKGROUNDER

AGRICULTURAL INCOME DISASTER ASSISTANCE PROGRAM

The AIDA program has been designed to provide assistance to producers facing dramatic income declines as a result of factors beyond their control, and for which existing programs cannot provide assurance of continuing the farm business.

The program has been designed to be in line with Canada's international trade agreements.

Key elements of the AIDA program:

   
• The program takes a "whole-farm" approach. All commodities will be covered.
   
• The program is a federal-provincial initiative taking into account provincial program differences that exist. Funds will flow to farmers in the greatest need.
   
• Coverage will be based on gross margins. Gross margin represents the income available to the farmer after paying for the cash operating costs on the farm; adjustments are made to assure that beginning farmers, high debt and low debt farmers, and those with high and low investment levels are treated equitably. When the gross margin in the claim year is negative, the negative portion is not covered.
   
• Maximum coverage will not exceed 70 per cent of gross margins averaged over the three previous years.
   
• A cap will be placed on payments. The federal share will be based on a cap to individuals that will not exceed $175,000. Payments to corporations or cooperatives will reflect the number of shareholders or members, to a maximum of five. Caps for the provincial share will be determined by the provincial program and may affect the total received by the applicant.
   
• This program complements the Net Income Stabilization Account (NISA) and crop insurance. Although those eligible for AIDA are not required to participate in NISA, the federal share of AIDA will include a deduction of the current year's government contribution to NISA for all NISA-eligible AIDA participants.
   
• In order to be eligible, individuals, farming corporations and co-operatives, and trusts must have filed a farm income tax return and supplementary information.
   
• Delivery will vary by province to recognize current provincial disaster programs.
   
• Application deadlines vary by province. Deadlines in those provinces with existing disaster programs will apply.
   
• Producers will not be required to pay any administration fees for the federal share of the program. Individual provinces may have administrative fees for their share of the overall program.
   
• Where there is an existing provincial program producers will have to apply only once.
   
• In provinces where the federal government is delivering the program, forms will be available from the AIDA website March 5, or from the AIDA administration in mid-March.
   
• Claims may be prorated if they exceed available funding.
   
• Further information can be obtained at 1-888-343-1064 (toll-free) or on the AIDA web-site at www.agr.ca/aida