Canada Unveils $b Farm Aid Package

OTTAWA - Mar 29/05 - SNS -- The Canadian government will provide Canadian farmers with a CDN $1 billion subsidy payout to offset the impact of "record low farm incomes", according to the announcement by Agriculture and Agri-Food Minister Andy Mitchell.

The $1 billion Farm Income Payment Program will supplement current federal, provincial and territorial agriculture programs that last year paid out a record $4.9 billion to farmers. The program will provide assistance to all sectors but will be of greatest benefit to two of the most affected, cattle and other ruminants and grains and oilseeds.

The Farm Income Payment Program includes a general payment of $841.5 million for all eligible Canadian producers. About 55% of that payment is expected to go to grains and oilseeds producers. Cattle and ruminant producers will receive about 18% of that payment.

In addition to their share of that payment, cattle and ruminant producers will also receive $155 million in direct payments based on their inventory as of December 23, 2003 to deal with the income pressures created by the ongoing closure of a number of borders to Canadian live cattle and other ruminants.

The Farm Income Payment Program will begin delivering the money in April as part of a two-part plan to ease immediate financial pressures on farmers and allow for a transformation of the industry that addresses the root causes of declining farm income.

Minister Mitchell noted that agriculture is a shared federal/provincial jurisdiction and called on the provinces to match today's announced initiative on a 60/40 basis. In the meantime, he said the Government of Canada is making this money available immediately to address the severe financial hurt in the sector.

"At a time when the marketplace is demanding bold innovation, farmers across Canada have been devastated by some of the most difficult years ever faced by the industry," said Minister Mitchell. "We need to immediately provide some stability to producers, across all sectors, and to move forward in a transforming way, which will take us beyond this frustrating cycle of crisis."

Transformation is already underway in Canada's cattle and ruminant industry. The Government of Canada announced the Repositioning Livestock Industry Strategy last September to develop a stronger industry that was less dependent on a single market and would also keep more value-added profit at home. That strategy is already leading to more processing capacity in Canada and is even more important now with the continued closure of the American border to Canadian live cattle and other ruminants.

The Farm Income Payment Program will be based on the same eligibility criteria used for last year's Transitional Industry Support Program (TISP), which provided $930 million in federal funds to help farmers deal with income pressures. Farmers who participated in TISP will automatically receive a payment under the Farm Income Payment Program. They will not need to apply.

Producers who were eligible for TISP but didn't apply can receive a payment under the Farm Income Payment Program. A guide and an application form for the Farm Income Payment Program will be available in the near future.

"This announcement comes at a crucial time for Canadian producers, particularly in the grains and oilseeds, ruminant, and horticulture sectors," said Bob Friesen, President of the Canadian Federation of Agriculture. "It is an important first step in helping to move producers past current challenges."

"Maintaining cash flow is critical for livestock and ruminant sectors as we wait for the re-opening of the American border and as we work with governments to reposition our sectors to recover from the current crisis and build a strong and more resilient industry for the future," said Canadian Cattlemen's Association President Stan Eby.