Industry leaders say $250 million federal agriculture support package falls short

WELLINGTON COUNTY – A federal financial support package for agriculture falls short of what’s needed in an industry hit hard by impacts of the COVID-19 pandemic, some industry leaders are saying.

Canada’s injection of $252 million into farm and food processing sectors, announced on May 5, is a fraction of the $2.6 billion in emergency funding the Canadian Federation of Agriculture (CFA) had requested from the government.

The federal government is providing targeted support to farmers, ranchers, agricultural producers, and food processors by:

– creating a $77.5 million Emergency Processing Fund to help food producers access more personal protective equipment (PPE), adapt to health protocols, automate or modernize their facilities, processes, and operations, and respond to emerging pressures from COVID-19;

– launching national Agri-Recovery initiatives of up to $125 million in funding to help producers faced with additional costs incurred by COVID-19. This includes set-asides for cattle and hog management programs to manage livestock backed-up on farms, due to the temporary closure of food processing plants;

– increasing the Canadian Dairy Commission’s borrowing limit by $200 million to support costs associated with the temporary storage of cheese and butter to avoid food waste;

– launching a first-ever surplus food purchase program with an initial $50 million fund designed to help redistribute existing and unsold inventories, which could include products such as potatoes and poultry, to local food organizations who are serving vulnerable Canadians;

– working with provinces and territories to increase interim payments from 50 to 75 per cent through AgriStability, a federal, provincial and territorial program that supports producers who face significant revenue declines; and

– working with provinces and territories to explore possibilities for expanding the Agri-Insurance program to include labour shortages as an eligible risk for the horticulture sector. This work with provincial and territorial partners would insure against lost production due to an insufficient workforce, should producers be unable to find enough labour to harvest.

“I want to reassure all our farmers and agri-business owners across the agri-food industry that our government fully understands that they are essential to our communities and that we are fully engaged to help them through this unprecedented period,” stated Minister of Agriculture and Agri-Food Marie-Claude Bibeau in a press release announcing the funding.

While welcoming the measures, the CFA stated in a May 5 release the $252 million “is not enough on its own to avert negative impacts to Canadian food supply in the coming months.”

“Farmers have been hit hard from all angles with rising operational costs, reduced processing plant capacity and closures, significant labour shortages and impacts from major reductions in the food service industry all undermining the viability of food producers and processors,” association officials state.

“Farmers are making decisions today on how confident they should be investing in further food production this year,” said CFA president Mary Robinson.

“They are making decisions right now that will have a direct impact on the variety and cost of domestic food availability for everyday Canadians. With such huge uncertainty in our sector and lack of a firm financial backstop, in essence we are asking our farmers to put themselves and their farms at risk to grow food for Canada. Many farmers are facing the reality that these risks are too great, and are having to modify their food production plans.”

The CFA is concerned the government’s position, to use using existing risk management programs such as AgriStability before rolling out additional funds, will result in support arriving too late to make a substantial impact.

“We understand that we aren’t the only ones asking for help right now. Many sectors and industries are in desperate need of support. However, after healthcare, there is nothing more important for Canada during this pandemic than domestic food security,” said Robinson.

The Ontario Federation of Agriculture (OFA) had already joined the CFA’s call for immediate financial assistance, noting the national federation had identified a need of $2.6 billion in government support for the agri-food industry.

“We are pleased to see the efforts of the federal government to provide financial support for Canada’s agriculture and food industry, but it’s evident this doesn’t measure up to our needs,” stated  OFA President Keith Currie.

“Without additional financial assistance across the industry, our domestic food supply and the entire food value chain is in jeopardy. This is critical to our food security and the health and well-being of all Canadians.

“It’s a good starting point for the industry, but we know many commodities in Ontario are facing unprecedented and difficult situations.”

Wellington Federation of Agriculture president Janet Harrop noted the funds for the processing industry will be needed to address long-standing issues, as well as more immediate ones.

“This has been an issue for years and years, so to properly address that issue, and be able to support what’s happening currently, the numbers I’ve heard through Ontario Federation of Agriculture, [the federal funding is] probably about a tenth of the amount that would be required to properly fix the system,” said Harrop.

However, she noted, “We want to be realistic. Given the time frame right now any kind of support is welcome. I mean there’s a lot of people with their hands out right now that are really in dire need of support.

“The other piece that has gotten us to this point is people aren’t used to going to grocery stores and having empty shelves,” said Harrop.

“For the most part, the food is pretty economical to purchase when you look at other countries around the world and how much of our income we spend on food in Canada.”

Harrop said Canada’s “cheap food policy” has consequences that are highlighted when the system is stressed.

“The margins all along that value chain become smaller and smaller which means the grocery stores get larger, processors get larger only to be able to make the business case and to have the scale of size that they economically can do the work and pay their people and make a bit of a profit. When you get larger processors and fewer of them and then you get an issue like COVID it brings to light how vulnerable that whole system is.”

Harrop said the set-aside program announced last week should help livestock producers, at least in the short-term.

“It’s really the only way to be able to address the economics on-farm for people who have to keep animals beyond their planned processing dates. They did it before with BSE (mad cow disease) and it’s a Band-aid, but it does work, it does help.”

Harrop was hopeful the surplus food program announced by the government will help farmers dealing with uncertain markets.

“I know there’s a lot of producers right now looking at putting seed in the ground  and in this area corn in particular …. and they don’t currently know if they have workers to come and help them plant and harvest these plants or a market at the end,” she explained.

“Corn is at rock bottom prices right now because … people aren’t driving – there is no economics in making ethanol.

“There are producers in Wellington County that will be planting corn as a cash crop and at the end of the year … corn is very costly to grow, margins on it are fairly small, but the people planting corn, which is part  of a normal crop rotation, if prices stay as low as they have been, they are not even going to be able to cover the cost of production.”

On his Twitter feed, Senator Rob Black called the funding announcement “a start,” and urged Bibeau to provide farmers with  “additional financial support.

“The funding announced today is not enough,” said Black, a Centre Wellington resident.

He explained the $252 million package only addresses certain sectors, doesn’t make up for the losses the industry has identified and doesn’t help all farmers.”

Dairy Farmers

welcome the help

The Dairy Farmers of Canada welcomed key elements of the package, including increased borrowing capacity for the Canadian Dairy Commission (CDC), and additional funding under the AgriRecovery Framework for a set-aside program, which would include dairy cull cows.

DFC president Pierre Lampron said the measures “will help offset the impacts of bottlenecks in the supply chain that have prevented dairy from getting from the farm to the store shelf.”

The dairy farmers organization also welcomed the surplus food purchase program announcement.

“Solidarity with our communities is a value that is near and dear to dairy farmers, which is why we have committed more than $10 million dollars in dairy products to food banks across the county to support Canadians in need,” said Lampron.

The Guelph-based Ontario Fruit and Vegetable Growers’ Association (OFVGA) released a statement indicating its members are encouraged by the support shown by the government.

“Although there is much more that needs to be done, yesterday’s funding announcement demonstrates that the federal government is beginning to take steps in support of domestic food security,” says OFVGA chair Bill George.

The association is encouraging the federal government to include fruit and vegetable sorting and packing facilities in the programs announced for processors and to work with the provinces to expand production insurance to include labour shortages related to COVID-19 as an insurable risk.

“As a sector that heavily relies on labour to plant, maintain, harvest, sort and pack fruits and vegetables, having labour disruptions backstopped is something the OFVGA has been recommending to government since the pandemic arrived in Canada,” George stated.