AFRP Payments Prove Disappointing To Many

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Perhaps the government should have been more transparent about the AFRP budget shortfall and made an effort to explain it to producers well before it sent out the cheques.

Cattle producers are now finding out what hog producers already knew a few months ago – payments under AFRP II are not what they expected. Even worse some are finding that since payments were declared income, they are in some cases being clawed back through the CAIS/ AgriStability program. That situation does not help government credibility, being that it led producers to believe otherwise with grandiose announcements about Alberta Farm Recovery Plan (AFRP) support over the past two years.

Hog producers were the first to point out the government’s sudden parsimony. They passed a motion at the Alberta Pork annual meeting expressing their displeasure with the government’s plans to reduce payments. Cattle producers perhaps are now double grumbling because their AFRP payments were also tied to participating in the age-verification program.

Officials at Alberta Agriculture state that their hands were tied and they had no choice but to reduce the second payments in order to stay within the amount originally budgeted for AFRP. But they must have known a budgeted shortfall would occur fairly early on when the first payments were made. As it turned out, more claimants than expected came out of the woodwork, especially cattle numbers. But that is not the fault of livestock producers, they bought into AFRP as it was promoted by government. I expect their bankers also had high expectations of AFRP.

Perhaps the government should have been more transparent about the AFRP budget shortfall and made an effort to explain it to producers well before it sent out the cheques. What were they thinking – that no one would notice? Making excuses after the fact is cold comfort.

One does appreciate that governments are under pressure in these uncertain times, but this situation had developed before the economic meltdown. One does wonder whether the minister trapped himself by stating, after he obtained the original AFRP funding, that there would be no more ad hoc support programs. OK, we can accept that, but the shortfall was more due to underestimation of what was needed by officials than anything else. Governments underestimate all the time and then make corrections.

Having said all that, it’s unlikely there will be a change of heart by the government. It’s too far along the process. All producers can hope for is that the AgriStability program and the much-anticipated cattle market price insurance program will provide some timely support and security.

To be fair, Alberta Agriculture has budgeted hundreds of millions to various “AgriHelp” programs. That money will work its way into the system, although if history is any guide, it will be too little too late. Which causes one once again to hope that government planning gnomes will continue in their quest to find the perfect agriculture support program. Hopefully, they will come to the realization that no matter how many times they try to fix national support programs all they are doing is reinventing the wheel.

I would suggest again they take a serious look at European and American support programs. I find our officials all too easily dismiss those programs as not relevant and trade distorting, but yet they continue and seem to work.

Many of them have evolved into environmental, conservation and preservation service-type programs. Yes, many of them can be described as glorified “watch grass grow” programs, but that is where these programs are headed elsewhere in the developed world. Carbon credits need to be better integrated into such programs.

Taxpayers and their political masters are indeed tired of agriculture always demanding handouts – sort of an AgriEnough attitude if you will. However, unless there is a drastic change in all commodity markets, some sector of agriculture will always need help. It’s an old song, but there has to be a better way.

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