After a decade of wrangling over how the government needs to support agricultural disasters, the federal government has announced the design of its new safety net package. It comes one year after hundreds of tractors hit Ontario roads demanding protection against low crop prices and severe weather, which plays havoc with their bottom line every three out of 10 years.

To meet farm demands, the federal government has scrapped the Net Income Stabilization Account (NISA) and will replace it with what it calls the new NISA. Farm leaders already don’t like what has been described as an "incredibly difficult" program to understand.

Under the old NISA a farmer could deposit up to three per cent of his eligible net sales into a safety net account. The money was matched by federal and provincial contributions, and paid out when income dropped. The farmer could bank the yearly contributions and even use them as a retirement package.

Under the new NISA, the billions of dollars in ad hoc programs used to bail out producers following disasters would disappear. In the long term, government funding would decrease and government funds in NISA would not be carried over to future years, eliminating the retirement package loophole.

The new NISA payout is triggered when income falls below the historic five-year average, where the best year and the worst year is eliminated, said Dave Hope, policy director with the Ministry of Agriculture and Food. "The amount of coverage is based on the historic farm income" and payout is based on production revenue (price and yield) minus the cost of inputs. Fixed costs are not counted, Hope said.

Programs will take effect April 1, 2003, and will not affect the 2002 harvest.

Crop insurance will continue, said Hope, though "It’s not fully determined how it will work."

The risk management program (safety nets) will get about $600 million per year over the next five years, said the director general for federal policy and planning for agriculture, Simon Kennedy. An additional $1.2 billion has been added as "bridging" or transition money over the next two years so the new NISA can be implemented without hitches, he explained.

Former OFA president Jack Wilkinson sees the new program as in adequate. Major corn producer, Alain Leduc, in Stormont County agrees. "The new program will end up destroying our agriculture because there is too little money,"he said.

As long as the U.S. farm bill exists, he says, the federal government will have to double its yearly offering of $600,000 to $1.2 billion.

Under the Agricultural Policy Framework (APF) program announced last June, the federal government will give the provinces $5.2 billion over a five-year period. The provinces provide matching funds of 40 per cent. Farmers will receive about $3 billion for NISA from the federal government and $120 million from the provincial government. About $2.2 billion of federal money under the program will be used for environmental and food safety programs.

Most provinces and the federal government have reached an agreement on the Agricultural Policy Framework (APF), which includes safety nets, but Saskatchewan and Prince Edward Island are holding off until some fine tuning takes place. And Quebec doesn’t want anything to do with the proposed program. Ontario is still negotiating with the federal government on safety net issues.

In February, after ministers of agriculture met in Toronto, Quebec Agricultural Minister Maxime Arseneau said he wouldn’t agree to the new framework unless there were a guarantee that farmers would be better off. He said the federal government will take more money from farmers but has yet to show him that a unilateral program across Canada would make Quebec farmers more prosperous.

Putting money into a federal program would make Quebec farmers less prosperous, he said. Farmers there are already happy with the Quebec program. In 2001, a Quebec farmer received $112 per acre in assistance for corn compared to $63 per acre for an Ontario farmer. American farmers received $123 per acre.