News release
BACKGROUNDER ON DROUGHT MEASURES
FARM FINANCIAL ASSISTANCE PROGRAMS
The Government of Canada recognizes the serious impact drought is having on some producers and is developing and implementing measures to mitigate its short and long term effects. The measures are as follows:
Agricultural Policy Framework (APF)
On June 20, the federal government announced a $5.2 billion investment in the agriculture sector over the next six years. Of this new money, $600 million will be delivered this fall and another $600 million next year - specifically to help farmers deal with short-term pressures like drought. An additional $589.5 million will accelerate the Agricultural Policy Framework. This includes $60 million to improve capacity to deal with drought situations through expanded water supply and water management measures, a portion of which - $10 million - will be delivered immediately for eligible but unfunded projects under the RWDP.
Crop Insurance
Across Canada, record levels of crop insurance protection have been purchased for 2002. More than 110,000 farmers have insured 68 million acres of crop and pasture. Farmers are purchasing insurance for more of their crops and higher levels of protection. This means payments will be at record high levels given the severe drought in Western Canada. In total, Crop Insurance payments could exceed $2 billion this year.
In an effort to further assist producers who carry Crop Insurance to cope with the effects of drought, the Government of Canada has agreed to be as flexible as possible in terms of making the appropriate administrative changes to Crop Insurance programming, if a province requests them.
Spring Credit Advance Program
Earlier this year AAFC announced an extension to the Spring Credit Advance Program which provides interest-free loans of up to $50,000 to help farmers deal with issues such as drought. It is estimated that up to $700 million will be made available through the program.
The Net Income Stabilization Account (NISA)
The Net Income Stabilization Account allows producers to deposit money annually into an account and receive matching government contributions. In low-income years, that money is available for producers to make annual or interim withdrawals, based on their entitlement. Currently, producers have $3.4 billion in their accounts with over $1 billion available for withdrawal.
The Canadian Farm Income Program (CFIP)
The Canadian Farm Income Program, is targeted on a whole-farm basis to those who experience a sudden and severe drop in net farming income, therefore ensuring that those most in need will receive assistance. CFIP is applied uniformly across the country and allows provincial flexibility to address producer-specific needs. CFIP is cost-shared on a 60/40 basis by federal and provincial governments. CFIP is expected to pay out about $412 million during 2002.
Prairie Farm Rehabilitation Administration (PFRA)
AAFC's Prairie Farm Rehabilitation Administration provides clients with professional and technical expertise through district offices in Manitoba, Saskatchewan, Alberta and the Peace River Region of British Columbia, PFRA provides programs and services that help mitigate drought, including developing rural water supplies and protecting and improving rural water quality.
The Rural Water Development Program (RWDP), is an ongoing initiative that provides technical and financial assistance to farmers, ranchers, agricultural and conservation groups, rural communities and municipalities for the development of planned long-term solutions to water supply issues.
In addition to its annual $5.5 million RWDP investment, the federal government provided $3 million in December 2001, for water development projects under the Canada-Saskatchewan Livestock Farm Water Program, as well as water studies in Alberta, Nova Scotia and Saskatchewan . When the demand exceeded the initial allocation for this program, the federal government provided an additional $1.1 million and the $10 million made available by today's announcement.
This past year the federal government spent $16 million on direct assistance and technical support for water supply projects, such as wells, dugouts, and studies of water availability and quality. This translates into about $20 million worth of investment in water development for drought-prone areas.
PFRA also manages 87 Community Pastures across the Prairies, consisting of 900,000 hectares for livestock grazing. Each year, close to 4,000 producers graze more than 200,000 cattle on PFRA community pastures. To help Saskatchewan and Alberta producers hardest hit by drought, Manitoba pastures with available grazing capacity have been provided for cattle from drought-affected areas.
PFRA provides continually updated information and advice on drought related topics and drought conditions through its Drought Watch Web site (http://www.agr.gc.ca/pfra/drought/default.htm) and through a series of articles.
Tax Deferral Program
A national initiative, the federal Tax Deferral Program provides an important management tool to producers, allowing those in designated areas, who are forced to sell all or part of their breeding herds due to drought conditions, to defer tax on a portion of sale proceeds to the following year.
To date, owners of breeding livestock in parts of western Manitoba, parts of Saskatchewan and all regions of Alberta, forced to sell all or part of their herd in 2002 due to drought conditions, will be eligible for a one-year tax deferral on 2002 income from those sales. For a list of eligible designated areas in: Manitoba, visit http://www.agr.gc.ca/cb/index_e.php?s1=n&s2=2002&page=n20724b, in Saskatchewan, visit http://www.agr.gc.ca/cb/index_e.php?s1=n&s2=2002&page=n20724c
For more information on these, and other programs, please go to Agriculture and Agri-Food Canada's Farm Financial Programs Web site at: http://www.agr.gc.ca/ffp/index_e.html or the Prairie Farm Rehabilitation Administration's Web site at: http://www.agr.gc.ca/pfra/
News releases index : and .