The economic resiliency of beef cattle production encompasses multiple domestic agriculture policies including risk management tools and the stable supply of labour.
CCA’s Principles on Business Risk Management (BRM)
- CCA believes that there needs to be sufficiently funded national agriculture risk management programs that are delivered consistently across all jurisdictions and must be as market and production neutral as possible.
- Programs need to be structured to minimize their influence on business decisions, allow industry to be driven by clear market signals and should not alter the competitive balance within the industry, including regional and sectoral.
- Programs must be timely, transparent and predictable.
- Programs must be equitably cost-shared with government and structured to minimize risk of foreign trade action.
- Disaster programs must be designed to specifically address the situation and to minimize its impact.
- CCA does support some flexibility in Government contributing to regional/provincial livestock insurance programs assuming the overall level of support is even across the country and the programs are market neutral.
BRM Policy Recommendations
Livestock Price Insurance (LPI)
- LPI is a forward-looking, market-based, insurance-style program that allows farmers and ranchers to manage price risk. CCA recommends LPI should be made a permanent BRM program. This change will greatly benefit youth in the cattle industry, who often don’t have equity to fall back on. LPI provides a solid backstop to help young farmers and ranchers weather the storm of depressed markets and continue operating the next year.
- Cost shared premiums with government would help increase uptake in the LPI program. Cost shared premiums would also put Canadian cattle farmers and ranchers on a more level playing field with crop farmers and American cattle farmers and ranchers, who both have access to premium subsidies through crop insurance and Livestock Risk Protection programs.
- Broaden LPI to enable participation by cattle farmers in the Maritime provinces who do not currently have access to a price insurance program and grow the industry across Canada.
Livestock Tax Deferral
CCA recommends the federal government make modifications to the Livestock Tax Deferral provision that would better enable farmers and ranchers to self-elect when the tool can be utilized and ensure all cattle are eligible under the deferral provision. This will enable farmers and ranchers to better financially adapt in the cases of drought, flooding or fires as these events often force farmers and ranchers to sell animals such as calves and breeding stock earlier than expected.
CCA recommends governments further enhance AgriStability by implementing the following changes:
- Increase the compensation rate from 70 per cent to 80 per cent.
- Remove, or significantly increase the current $3 million payment cap, which discriminates against larger operations. These operations, in most cases, grew because of competitive operating practices. These large operations contribute significantly to rural employment and prosperity. Caps should be removed so that all farm business structures are treated equal and are on a level playing field.
- Increase the payment trigger from 70 per cent to 85 per cent. With multi-year downturns in production margins during the CAP framework, many farmers and ranchers’ reference margins have significantly eroded and are already at risk of decreased program coverage for an extended period moving forward.
- AgriRecovery has supported farmers and ranchers dealing with disaster situations in several areas in Canada but improvements are possible. Clear triggers and clear follow up that does not depend on political decision making will help farmers and ranchers take action following disaster events. Furthermore, CCA believes disaster programs under AgriRecovery must also have flexibility and be designed to specifically address the situation and to minimize its impact.
- With respect to the 2020 Set-Aside initiative under AgriRecovery, CCA believes it is prudent for governments to ensure this program framework is readily accessible and available to be rolled out quickly if processing slowdowns occur again. Additionally, any future AgriRecovery initiative should be designed so that the program intake deadline aligns with the program funding deadline.
Forage and Pasture Insurance
Improved hay and forage insurance across the country is needed. Government cost-shared agriculture insurance programs offer coverage for forage crops, including pasture and hay, across Canada. However, farmer and rancher participation in these programs is low relative to annual crops. Forage insurance product offerings are often distinct from annual crops in that coverage and subsequent claim settlement are area based and not based on the production of an individual farm. The lack of individual farm insurance coverage for forages may act as a deterrent to participation and represents a source of inequity between perennial and annual crop BRM solutions. Pasture and forage insurance programs should also be equipped with a mechanism that helps farmers and ranchers account for increased feed prices during times of shortages. These program design improvements could alleviate calls for AgriRecovery during times of drought or flooding.
Advance Payments Program
CCA requests that the interest-free portion of the Advance Payments Program (APP) be increased to $500,000.
Addressing Labour Shortages
- The Canadian beef industry continues to need better access to skilled labour. Our sector employs 13 per cent of Canada’s agricultural workforce, making it one of the agriculture sector’s largest employers. According to a recent Canadian Agricultural Human Resource Council (CAHRC) report, in 2017 Canada’s primary beef industry was unable to fill 1,700 jobs with available domestic labour. This shortage cost the industry $334 million. By 2029, the beef industry’s labour gap is expected to widen even further, with more than 14,000 jobs at risk of going unfilled.
- The Temporary Foreign Worker (TFW) program is used by beef farmers and ranchers as a measure of last resort for securing workers to augment—never replace—the domestic workforce. These workers are brought in under the TFW program for permanent and full-time work, and efforts typically begin shortly thereafter to transition them to permanent residents. These workers become an important part of building our rural economy. All segments of the beef cattle industry utilize TFWs including cow-calf operations, backgrounders and feedlots. Ensuring Canada’s beef processing plants also have access to TFWs to augment domestic labour supply, along with viable pathways for TFWs to gain permanent residency, is critical for the sustainability and competitiveness our industry.
- CCA recommends that the Government of Canada establish mechanisms that prioritize access to permanent residence for temporary foreign workers in agriculture and agri-food sectors that are particularly affected by labour shortages. The recent Agri-Food Immigration Pilot and Budget 2021 immigration policy announcement are good examples of these policy mechanisms that should be expanded on.
- The shortage of labour in the primary agriculture and processing sector is a serious threat to the sector’s economic viability and to Canada’s food security. The CCA stands with every other segment of Canadian agriculture and primary processing in supporting the recommendations of the Labour Task Force’s Canadian Agricultural and Agri-Food Workforce Action Plan (WAP). The WAP’s recommendations are focused on increasing the supply and enhancing skills and training of workers in the industry. Under the APF, CCA recommends that financial resources be dedicated to support the swift implementation of the WAP.