As the harvest season approaches, farmers, industry and governments are monitoring conditions closely. In parts of Ontario and Quebec, farmers are experiencing severe drought conditions and efforts are underway to assess the impacts. The Disaster Assessment/Analysis Division, with Agriculture and Agri-Food Canada (AAFC) provides disaster assistance.
“For 2012, drought is the major weather related issue we are focusing on, mostly in parts of Ontario and Quebec,” says Todd Hunter, Senior Operations Officer with AAFC. This is very different from 2011, where flooding in the prairies was the priority. “The Pontiac region of Quebec, the Ottawa Valley or Renfrew County, and an area south and west of Toronto in Ontario are the key areas we are watching. There was also an area of severe frost this spring in Ontario, impacting apples and other tender fruit that we are assessing.”
Producers have access to a suite of Business Risk Management Programs (BRM) provided by federal, provincial and territorial governments to help deal with financial losses resulting from perils such as drought, including AgriInsurance, AgriStability and AgriInvest. “Our division works on the AgriRecovery framework, a disaster program that is designed to respond to disaster situations that other BRM programs don’t cover,” explains Hunter. “AgriRecovery and the other three BRM programs are designed to work together.”
In a disaster situation like drought, provinces and territories can request an assessment of the impacts under the AgriRecovery framework. In 2012, the provinces of Quebec and Ontario have submitted assessment requests for the drought situation and Ontario has submitted an assessment for the spring frost situation.
“We work closely with farmers, crop insurance and provincial, territorial and federal government officials to gather as much data as possible,” says Hunter. “We try to identify extraordinary costs producers might face, determine what is covered by the existing BRM programs and where warranted provide assistance for those disaster related costs not covered by existing programming.” Any disaster relief must complement existing BRM programs, but will not replace them.
“Looking at the flooding disaster relief as an example, AgriRecovery provided assistance to the flooded regions for expenses related to clean up after the flood and other expenses to help producers get up and running,” explains Hunter. “AgriRecovery is designed to help producers get back into business, but does not help with revenue or production losses as those are covered by other programs.”
BRM Programs and Drought
The three main BRM programs producers can participate in include AgriInsurance, AgriStability and AgriInvest:
- AgriInsurance – provides producers with affordable and effective protection against the financial impacts of production and quality declines resulting from a wide variety of insurable perils for fresh and processing vegetables, fruits, forages, silages, grains and oilseeds.
- AgriStability – provides producers with protection against income declines resulting from production losses and/or increases in expenses. An interim mechanism is available that allows participating producers to access up to 50 percent of their estimated AgriStability payments to assist with immediate cashflow pressure, such as those impacted by drought.
- AgriInvest – is an annual savings program with matching government contributions to a maximum of $22,500. Producers can withdraw AgriInvest funding from their program account at any time to help offset income losses.
There is another provision for cattle producers in a designated disaster region such as drought or flooding. “If cattle producers need to downsize because of drought and they are located in the prescribed drought region, then they can use the Livestock Tax Deferral Program to defer a portion of sale proceeds to the following year without tax consequences,” explains Hunter. “Although downsizing my not be the most desirable option especially for breeding herds, there is this provision for producers if they need it.”
Overall, the Agri-Insurance or production insurance is the best tool, with AgriStability a close second. In disaster situations, the AgriRecovery framework can be implemented to complement other assistance programs but is not the primary tool for farmers for agriculture. Farm Management Canada has also created a list of resources to help farmers navigate through the help available for the current drought affected areas, along with news and updates. Go to:
“Producers across Canada have access to suite of Business Risk Management Programs to help deal with financial losses resulting from drought, flooding, hail or other perils,” says Todd Hunter. “These include AgriInsurance, AgriStability, AgriInvest, plus AgriRecovery, a framework for assessing the impacts of a disaster event.”
Agriculture and Agri-Food Canada
Toll-free: 1-855-773-0241 (Direct: 613-773-1000)