Advancing business risk management for producers

The need for modernization of our business risk management programs has been further emphasized throughout the pandemic. 

By Katelyn Laverdure, Lead, Stakeholder Communications, ABP

Alberta Beef Producers (ABP) has and continues to put significant efforts towards communicating and consulting with provincial and federal governments on how to best support producers, with continued conversations focused solely on business risk management. 

The following is a timeline of industry response to COVID-19 as it relates to business risk management programs.

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March 2020

The Canadian Cattlemen’s Association (CCA) began a conversation with the federal government in a letter to Agriculture and Agri-Food Minister Bibeau requesting the entire food supply chain be designated as critical infrastructure; COVID-19 be declared a natural disaster under AgriRecovery; preparation for a potential major supply chain disruption that would require the development of a fed cattle set-aside program; modification of Livestock Price Insurance (formerly WLPIP) to include a cost-shared premium structure; and that changes be made to AgriStability to make it more effective at managing risk. 

A joint letter was sent to Minister Bibeau, Minister Hajdu and Minister Morneau on behalf of all provincial cattle commissions to underscore the importance of maintaining business continuity at all levels of the supply chain. ABP and the Alberta Cattle Feeders’ Association (ACFA) sent a similar letter to Alberta Minister of Agriculture and Forestry Devin  Dreeshen outlining the potential risks of COVID-19 to the beef industry.

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May 2020 

The federal government announced $252 million of agriculture funding support following the temporary closure of the Cargill High River processing plant. It included $125 million in disaster relief funding through AgriRecovery, with $50 million dedicated to a federal-provincial set-aside program. With the federal commitment in place, ABP released a statement asking the provincial government to support Alberta’s beef industry by committing to the provincial portion of AgriRecovery funding. The Government of Alberta announced their commitment on May 7, 2020.

ABP and ACFA submitted a joint proposal to the Alberta government for immediate financial  assistance to cow calf and backgrounding producers, requesting funding to reduce the premiums on cow calf and feeder policies under  Livestock Price Insurance, and support for the growing federal and provincial initiative to eliminate  the Reference Margin Limit on AgriStability. 

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July 2020

A joint letter sent to Minister Bibeau on behalf of all provincial cattle commissions requested the following changes to AgriStability: elimination of the $3 million payment cap, removal of the Reference  Margin Limits, and to increase the payment trigger  from 75 to 85 percent.

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November 2020

The federal government announced a proposal, based on the recommendations from industry, to eliminate the reference margin limit and boost the compensation rate to 80 percent. 

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December 2020

A joint letter was sent to Minister Dreeshen on behalf of 11 Alberta agriculture commodity groups encouraging the provincial government to accept the federal government’s AgriStability proposal. 

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January 2021

ABP met with Minister Dreeshen to reiterate support of the federal government’s proposal and to encourage the provincial government to accept the changes to AgriStability that would add $170 million to the national program. 

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February 2021

ABP and ACFA provided comments and recommendations to the provincial government on the complete business risk management suite.

ABP met with Minister Dreeshen once again to encourage provincial support of the federal government’s proposed changes to AgriStability.

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March 17, 2021

The federal government issued a statement urging the prairie provinces to support the proposed changes to AgriStability, acknowledging the request from provincial agriculture ministers to hold a federal-provincial-territorial ministers meeting on the issue. 

After Minister Bibeau’s statement, CCA issued a statement of support, ABP issued a statement strongly encouraging the provincial government to accept the proposed changes, and the 11 Alberta agriculture commodity groups issued a joint statement calling for a decision from the provincial government.

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On March 25, 2021, federal and provincial governments reached consensus on the removal of the reference  margin limit, increasing the overall AgriStability pay out amount by approximately $95 million. The removal of the reference margin limit will be retroactive to 2020 and the AgriStability enrollment deadline has been extended to June 30, 2021.

ABP welcomes decision on removal of AgriStability reference margin limit

While a decision on the compensation rate was not made, the federal government has expressed that the offer  remains on the table with a hard deadline of June 30, 2021.

These changes aim to simplify AgriStability and help producers by making it easier for agricultural operations  with lower allowable expenses Advancing Business Risk Management for Producers to trigger when in need. This  is an important step towards making the program more accessible and we encourage producers to review the  changes with a financial planner to see if AgriStability works on their farm or ranch.

This article was first published in the May 2021 edition of ABP Magazine. Stay tuned to see more content from the magazine.