A new three-year agreement on whole farm income stabilization programs has been signed by Agriculture and Agri-Food Minister Ralph Goodale and Agriculture, Fisheries and Forestry Minister Walter Bradley. The bilateral agreement was signed during the annual meeting of federal, provincial and territorial ministers today in Victoria, British Columbia.
Under the new agreement, the federal and provincial governments will contribute to an enhanced Net Income Stabilization Program (NISA) and establish a new Agricultural Disaster Insurance Program (ADIP.) These programs are in addition to the basic NISA program, Crop Insurance and the Agricultural Research Investment Fund.
Total contributions by the federal and provincial governments will be approximately $10 million annually, on a 60-40 cost sharing ratio. Producer contributions, in the form of Crop Insurance premiums and NISA contributions, could be more than $7 million annually.
"These programs recognize the many unique climate and market risks faced by agricultural producers and the need for safety net programs which are effective, affordable, equitable and non-trade distorting in nature," said Mr. Bradley. "They also reflect a new approach to safety net programs under which producers take more responsibility for risk management and with an increased emphasis on diversification and other adaptation measures."
Under the enhanced NISA program, the two levels of government will increase the maximum matching of contributions by producers from three percent to six percent of eligible net sales for the next three years. This will allow producers to build up their accounts more quickly.
The new Agricultural Disaster Insurance Program is designed to provide income stabilization to producers when margins fall below 70 percent of the preceding three year average. There is no cost to producers other than a nominal administration fee. To be eligible, producers must be enrolled in NISA. The program is being established with an original commitment of more than $1 million. Payments will be pro rated in the event that eligibility exceed the program fund balance.
The current crop insurance program ends in March of 1997. It is presently under review, and it is expected it will continue to be offered. A bacterial ringrot program provides for insurance against a positive BRR infection in potatoes. It is funded two-thirds by producers and one-third by the province.
The Agricultural Research Investment Fund was established as a provincial initiative in 1995. It is designed to promote short-term research with direct applications to the changing needs and priorities of the industry in this province.
Mr. Bradley said that while the objective for the whole farm program and crop insurance is to have a unified national approach, some provincial variations have been negotiated between Prince Edward Island and the federal government which recognizes the specific nature of agriculture in our province.
"This agreement has taken a long time to finalize, and I appreciate the contribution our industry has made through extensive consultations, to design a new safety net package suitable to Island producers," said Mr. Bradley.