AGRI Committee Report

GOVERNMENT RESPONSE TO THE THIRD REPORT OF THE STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD ENTITLED: GROWING FORWARD 2

INTRODUCTION

The Government of Canada is pleased to respond to the Third Report (the Report) of the House of Commons Standing Committee on Agriculture and Agri-Food (the Committee) entitled: Growing Forward 2. The Government agrees with the overall intent of the Report and shares the Committee’s commitment to developing a sector that will position itself to respond to future opportunities and challenges, and create the conditions for long-term competitiveness, sustainability and adaptability.

The tabling of the Report is timely as Agriculture and Agri-Food Canada (AAFC), in collaboration with provincial and territorial governments, is developing the successor to Growing Forward, the existing agricultural policy framework set to expire March 31, 2013.

The consultations of the Committee complement the stakeholder engagement activities undertaken by the federal, provincial and territorial (FPT) governments as part of the Growing Forward 2 development process. FPT governments began engaging the sector in 2010, with a focus on the long-term challenges and opportunities affecting the sector. FPT governments engaged stakeholders in 2011 on how the policy framework could enable the sector to respond to challenges and take advantage of market opportunities. Much of what the Committee heard corresponds with the input and feedback AAFC has been receiving from stakeholders on the types of initiatives that the sector needs to ensure its long-term competitiveness and sustainability.

In 2011, FPT Ministers of Agriculture endorsed the Saint Andrews Statement (SAS), which detailed the intent, vision, principles, and objectives of the next policy framework. The SAS also identifies policy directions to respond to future opportunities and challenges, and enable the sector to create the conditions for long-term competitiveness, sustainability and adaptability, while recognizing that innovation and regulatory and institutional frameworks are essential to the sector’s success. The recommendations found in the Report broadly correspond to the directions outlined in SAS.

The Government has carefully reviewed the recommendations in the Committee’s Report and welcomes the opportunity to respond to each recommendation in full. It should be noted that these specific responses cannot capture all of the work that has been undertaken by the Government over the years.

RECOMMENDATION 1

The Committee recommends that Growing Forward 2 recognize that the prosperity of the agriculture and agri-food sector depends on the sector’s ability to take advantage of international and domestic market trends; and that the strategic framework focus on programs that improve competitiveness, such as innovation and trade.

The Government agrees with the Committee that the prosperity of the agriculture and agri-food sector depends on the ability of the sector to take advantage of domestic and international market opportunities, and that the strategic framework focus on programs that improve competitiveness, such as innovation and trade.

Agriculture and Agri-Food Canada (AAFC) has committed funding under Growing Forward (GF) and from other sources to accelerate the pace of innovation and support the adoption of new technologies, develop business skills, enhance the safety and security of Canada’s food system, and improve the long-term competitiveness of the agriculture and agri-food sector.

Under GF, the Developing Innovative Agri-Products Initiative and the Canadian Agri-Science Clusters Initiative aim to accelerate innovation and commercialization. In addition to GF programming, the Canadian Agricultural Adaptation Program seeks to facilitate the sector's ability to seize opportunities, adapt and remain competitive, and the Agri-Processing Initiative and the AgriFlexibility Fund also represent investments into innovation of the sector. With Budget 2011, the federal government provided $50 million for the new Agricultural Innovation Program, aimed to help the sector capture opportunities in domestic and global markets, accelerate innovation, commercialization and adoption of innovative products, technologies, processes and services, for economic growth and competitiveness of the sector.

Innovation support is also available to the sector through other federal organizations and initiatives, such as the Natural Sciences and Engineering Research Council and the Industrial Research Assistance Program, which help the sector to develop and implement new technologies and products.

AAFC facilitates the sector’s ability to access both international and domestic markets through several other programs, including the Canada Brand Strategy, which aims to gain recognition for Canadian food and agriculture products in both domestic and international markets; the Global Analysis program, which provides market intelligence to industry players and helps firms build their marketing and export capacity; the AgriMarketing Program, which provides industry with resources and capacity to take advantage of gains made in market access, as well as new opportunities presented by consumer preferences and emerging food trends; and the Trade Commissioner Service, which ensures stronger bilateral engagements with trading partners to eliminate or reduce trade restrictions and irritants.

The Government is committed to the pursuit of new and deeper international trade agreements with key markets that will provide the agriculture and agri-food sector with improved market access and new export opportunities. Trade agreements came into force with Colombia in 2011 and Peru in 2009. The Canada-Jordan trade agreement has been ratified and both countries are working to set an entry into force date. The trade agreement with Panama is in the process of being ratified by Parliament. Canada has also concluded negotiations with Honduras. Currently, Canada is in negotiations with a number of trading partners, including the European Union, India and Japan.

Regional activities by other federal government departments and agencies also help to improve the competitiveness of the sector. For example, Western Economic Diversification Canada provided support to agricultural and agri-food marketing and research activities, such as participation in Agritechnica, the world’s largest exhibition of agricultural equipment; establishing new markets for bison products in the Middle East; the creation of a National Bee Diagnostic Services Centre; and the creation of a cranberry research centre.

The Government will continue to focus on the competitiveness of the sector through innovation and trade under Growing Forward 2 and aims to build on the success of existing innovation and trade programs such as the Agri-Science Clusters Initiative, the Developing Innovative Agri-Products Initiative, AgriMarketing, and the Canada Brand Strategy.

RECOMMENDATION 2

The Committee recommends that Agriculture and Agri-Food Canada conduct an analysis of its practices and administrative policies in order to determine whether any have the potential to impede collaboration among the various research bodies, and that it propose ways of removing those impediments.

The Government agrees with the Committee’s recommendation that Agriculture and Agri-Food Canada (AAFC) review its practices and administrative policies to identify any potential impediments to collaboration among various research bodies, and propose ways to remove any such impediments.

Building on its long standing partnerships with producer groups, universities, hospitals, provinces, and private companies, AAFC continuously strives to strengthen its current collaborations and also forge new business relationships with new partners as it endeavors to foster innovation in the agriculture and agri-food sector.

At the same time, sound administrative procedures related to project proposal review, project governance, revenue management, and data management have enabled AAFC to strategically manage its large portfolio of research projects.

AAFC has developed a Collaborative Research and Development Agreement (CRADA) with industry and other research bodies. The CRADA ensures: impartiality and fairness in building collaborations, timely decision making, accountability, as well as transparency and openness. It has been used successfully to manage small scale and large scale collaborations alike.

AAFC will continue to work together with other federal departments to assess the effectiveness of current policies and practices and identify ways to remove any impediments to research collaboration.

RECOMMENDATION 3

The Committee recommends that Growing Forward 2 include support for the commercialization and adaptation of innovation, similar to the current Agricultural Innovation Program, or other fiscally responsible incentives.

The Government agrees with the Committee’s recommendation that commercialization and adaptation of innovation are essential for increased competitiveness of the industry.

The Government currently provides support for innovation, adoption and commercialization of new products and processes. Under Growing Forward (GF), the Developing Innovative Agri-Products Initiative provided funding of over $41 million for agricultural applied science to help build an innovative and competitive agricultural sector, by encouraging investment to transform innovative ideas into new agri-products, practices, and processes. The Canadian Agri-Science Clusters Program provided approximately $68 million to 10 projects to help key industry-led organizations pull together scientific and technical resources to advance their objectives for enhanced profitability and competitiveness. Budget 2010 provided support for innovation and commercialization through programs such as the Agri-Processing Initiative and the AgriFlexibility Fund.

With Budget 2011, the federal government provided $50 million for the new Agricultural Innovation Program (AIP), which is designed to help the sector capture opportunities in domestic and global markets, accelerate the pace of innovation, and facilitate the commercialization and adoption of innovative products, technologies, processes and services that will enhance economic growth and competitiveness of the sector.

In July 2011, the federal-provincial-territorial Ministers of Agriculture endorsed the Saint Andrews Statement, which identifies innovation as a driver to achieve sector competitiveness, adaptability and sustainability.

The Government, in collaboration with provincial and territorial counterparts, will aim for Growing Forward 2 to build on the success of GF programs and other programs to provide fiscally responsible incentives and programs, similar to the AIP in support of commercialization and adoption of new products and processes.

RECOMMENDATION 4

The Committee recommends that the Agri-Science Clusters Initiative be renewed and that the rules be amended so that the direction of a given project can be changed and funds can be reallocated from one period to another.

The Government acknowledges the Committee’s recommendation to renew the Canadian Agri-Science Clusters Initiative but does not agree that rules be amended to allow funds to be reallocated from one period to another.

Preliminary results from the Canadian Agri-Science Clusters Initiative are showing significant achievements and industry commitment, and the research collaboration is yielding promising results.

The inability to roll-over funds from year to year under the current Canadian Agri-Science Clusters Initiative was noted by a number of Cluster recipients. However, funding is appropriated on a yearly basis to conform to financial accountability requirements.

The Government, in collaboration with provincial and territorial counterparts, is considering renewal of the Canadian Agri-Science Clusters Initiative for the suite of Growing Forward 2 programs and initiatives. While Agriculture and Agri-Food Canada (AAFC) is unable to automatically carry over unspent Cluster funding from year to year, AAFC is looking at ways to increase flexibility with future programming.

RECOMMENDATION 5

The Committee recommends that the Developing Innovative Agri-Products Initiative be renewed and that a program like the Agricultural Flexibility Fund be included in Growing Forward 2 as an alternate and flexible source of funding to facilitate short- and long-term research on emerging issues that may involve one or more commodities.

The Government acknowledges the recommendation that the Developing Innovative Agri-Products (DIAP) Initiative be renewed and that a program like the Agricultural Flexibility Fund be included in Growing Forward 2 (GF2), as an alternate and flexible source of funding to facilitate short and long-term research.

The Government currently provides support for innovation, adoption and commercialization of new products and processes. Under Growing Forward, the DIAP Initiative provided funding of over $41 million for agricultural applied science to help build an innovative and competitive agricultural sector, by encouraging investment to transform innovative ideas into new agri-products, practices, and processes.

The Agricultural Flexibility Fund was created in 2009 in the context of difficult economic times, as part of Canada's Economic Action Plan (Budget 2009), which focused on strengthening the economy. With Budget 2011, the federal government provided $50 million for the new Agricultural Innovation Program (AIP) to help the sector capture opportunities in domestic and global markets and accelerate innovation commercialization. With Budget 2012, the Government is working towards returning to balanced budgets and securing Canada's economic future.

The Government will continue to focus on investment in innovation under GF2. All program options, including the DIAP Initiative and other similar initiatives under the Agricultural Flexibility Fund, are being considered to ensure that GF2 will support research and innovation and will help farmers become more competitive.

RECOMMENDATION 6

The Committee recommends that Agriculture and Agri-Food Canada simplify the administrative and accountability procedures of its research and innovation support programs by implementing a system of appropriate audits and ensuring that the rules are applied consistently to all research institutions.

Agriculture and Agri-Food Canada (AAFC) agrees with the recommendation to simplify the administrative and accountability procedures of research and innovation programs through the implementation of appropriate audit systems and consistent application of rules to all research institutions.

AAFC is committed to ensuring that procedures are as simplified as feasible and that rules are applied consistently, while at the same time exercising due diligence within the disbursement of public funds. Innovation programs (e.g., the Canadian Agri-Science Clusters Initiative) that provide contributions, as opposed to grants, require satisfactory documentation for reimbursement of expenses. This cannot be replaced by spot audits. Recipient audits are supplementary to the regular and on-going oversight and controls.

The peer review of proposals and ongoing programs is a mechanism for evaluating the technical merit, feasibility, and relevance of scientific activities. In the context of the Canadian Agri-Science Cluster Initiative, details about the requirements for peer review are outlined in the proposal guide. Agri-Science Cluster recipients, on average, completed the peer reviews of their projects in less than five months after the signing of the agreements. Some latitude was provided for those who encountered delays.

Reporting on the performance and outcomes of programs is part of the Government’s accountability obligation for public investments. Some Canadian Agri-Science Cluster recipients have occasionally found the processes to be cumbersome, but have fulfilled their obligations under the program.

The rules governing the disbursement of contribution funding state clearly that Government of Canada researchers (including AAFC researchers), cannot receive contribution funds, and that funding cannot be used to cover costs associated with federal government travel and hospitality. In this regard, it is not possible to treat all research institutions the same, since funding can be used to pay for costs associated with non-federal researchers, but not for federal researchers.

AAFC is looking at ways of streamlining processes and reducing the administrative burden in future programming, while at the same time ensuring that the obligations to accountability and performance reporting are adhered.

RECOMMENDATION 7

The Committee recommends that Agriculture and Agri-Food Canada increase the Market Access Secretariat’s budget in order to increase the secretariat’s capability to solve market access problems encountered by the Canadian agriculture and agri-food sector.

The Government acknowledges the importance of solving market access problems encountered by the Canadian agriculture and agri-food sector, as well as the role of the Market Access Secretariat (MAS) and other programs. Exports are essential to the success and prosperity of the Canadian agriculture and agri-food industry, given that currently $44.4 billion in sales are derived from exports.

The MAS, established in January 2009, contributes to the collaborative efforts of Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, and Foreign Affairs and International Trade Canada to increase trade opportunities for the sector and enhance its profitability.

In 2011, the MAS received $1.65 million in funding through the Agricultural Flexibility Fund Initiative to address significant trade irritants across multiple sectors in key markets. This has succeeded in opening markets to Canadian products, in particular China and Russia for Canadian beef, and in maintaining access to China for canola.

The Government also pursues the implementation of global science-based trade rules that would help prevent market access issues from arising in the first place through active engagement in international standard-setting bodies, such as the World Organization for Animal Health, Codex Alimentarius Commission and the International Plant Protection Convention.

The Government continues to be committed to resolving market access issues through advocacy efforts both at the bilateral and multilateral levels in order to keep the markets open and maintain the competitive position of Canadian agri-food exporters.

Furthermore, as the Government develops Growing Forward 2 with provincial and territorial governments, programs necessary to solve market access problems are being considered, including the proposal to increase the capacity of the MAS.

RECOMMENDATION 8

The Committee recommends that Agriculture and Agri-Food Canada consider the feasibility of transforming the generic component of the AgriMarketing Program into a multi-year export support program modeled after the International Pork Marketing Fund.

The Government agrees that in certain situations, a multi-year model is the best approach to support a sector’s export growth. In this respect, where a sector has demonstrated the capacity to effectively use program funding over time, the AgriMarketing Program does support multi-year contribution agreements similar to the Beef and Cattle Market Development Fund and the International Pork Marketing Fund.

As part of the FPT discussions on Growing Forward 2 programming, the Government is considering what changes, if any, are necessary to ensure that the AgriMarketing Program is as effective as possible in helping position the agriculture and agri-food industry to identify and seize new opportunities stemming from successful free trade negotiations, emerging markets, and new food and retail trends.

RECOMMENDATION 9

The Committee recommends that Agriculture and Agri-Food Canada and industry jointly explore a more effective procedure for analyzing files submitted under the AgriMarketing Program for small and medium-sized businesses.

The Government agrees with the Committee’s recommendation that Agriculture and Agri-Food Canada (AAFC) and industry jointly explore a more effective procedure for analyzing files submitted under the AgriMarketing Program for small and medium-sized enterprises (SMEs).

The Government recognizes the importance of the SME portion of the AgriMarketing Program. As part of the Department’s effort to constantly improve its services, AAFC established a small working group with AgriMarketing recipients to discuss the SME process. This working group identified potential options to improve the SME application and review process. Based on the working group’s discussions to date, the AgriMarketing Program has implemented a number of changes to support the SME process.

RECOMMENDATION 10

The Committee recommends that Growing Forward 2 include a support program for the development and implementation of national marketing strategies developed, for example, by the Value Chain Round Tables. /p>

The Government agrees with the Committee’s recommendation for Agriculture and Agri-Food Canada (AAFC) to provide support for the development and implementation of national marketing strategies by Value Chain Roundtables (VCRTs) or through other initiatives.

AAFC provides leadership and support to the VCRTs in the development of national strategies in areas such as marketing, research, innovation, and environmental sustainability for various agriculture and agri-food sub-sectors.

The Government also supports industry efforts with programs such as AAFC’s AgriMarketing Program, which provides export capacity to industry players, and the Canada Brand Strategy, which promotes the advantages of Canadian products both domestically and internationally. The agriculture and agri-food sectors are encouraged to leverage the Canada Brand in all of their marketing and promotional activities through their participation in the AgriMarketing Program.

In the next agricultural policy framework, the Government aims to continue to facilitate industry’s capacity to develop marketing strategies.

RECOMMENDATION 11

The Committee recommends that programs be incorporated into Growing Forward 2 that would help the Canadian agriculture and agri-food sector adapt to and meet consumer demands.

The Government agrees with the Committee’s recommendation to incorporate programs into Growing Forward 2 (GF2) that would help the Canadian agriculture and agri-food sector adapt to and meet consumer demands.

Under Growing Forward, the Government, in collaboration with provinces and territories, continues to assist agricultural and agri-food businesses to adapt and meet consumer demands through funding support to industry of about $50 million per year for the development and implementation of national food safety and biosecurity systems, and national traceability systems.

In addition, under the Canadian Agricultural Adaptation Program, the Government has provided $163 million over five years (2009-2014) to facilitate the sector's ability to seize opportunities, and pilot solutions to new and ongoing issues in order to adapt and remain competitive.

In the Saint Andrews Statement (2011), which outlines GF2 policy directions, the Government, together with its provincial and territorial counterparts, has committed to continue supporting the development and implementation of systems that improve the sector’s capacity to adapt and meet consumer demands.

RECOMMENDATION 12

The Committee recommends that the government seek to achieve food safety regulation equivalency with trading partners, develop processes to increase regulatory compatibility, and recognize scientific evidence from other countries where appropriate and meeting Canadian standards.

The Government agrees with the Committee’s recommendation and is committed to regulatory modernization in order to enhance international market opportunities for the Canadian food industry by further aligning our food system with our trading partners.

Agriculture and Agri-Food Canada is working with Health Canada to improve processes that encourage the recognition of science from other jurisdictions and research-based equivalencies for the approval of minor use pesticides and veterinary drugs. To date, investments have been made to expedite the regulatory review process for pesticides and to eliminate the backlog of veterinary drugs submissions.

Through government-wide regulatory initiatives, such as the Regulatory Cooperation Council and Red Tape Reduction Commission, actions are being taken to achieve and maintain new levels of regulatory cooperation and alignment with trading partners, such as the United States (US), in order to maintain Canada’s food safety system as one of the best in the world and enhance the competitiveness of the agri-food sector.

In the area of food safety, the Canadian Food Inspection Agency, Health Canada, and the US Food and Drug Administration are working to better align regulatory systems, to the extent feasible, and better leverage resources to help both countries meet their public health objectives.

Canada also participates in the work of international standard setting bodies, such as Codex Alimentarius and the World Animal Health Organisation to develop and encourage the use of international standards as the basis of comparable domestic measures, while maintaining the food safety standards Canadians expect.

The Government continues to be committed to advancing food safety regulatory alignment and compatibility with trading partners.

RECOMMENDATION 13

The Committee recommends that Growing Forward 2 include specific support programs for new entrants in agriculture, for continuous training and learning and for organizations that promote and deliver farm management consulting services.

The Government acknowledges the Committee’s recommendation for Growing Forward 2 to include specific programs to support new entrants in agriculture. Young and beginning farmers are critical to the renewal and future of the sector, and the Government, often working collaboratively with its provincial and territorial counterparts, has consistently supported young and beginning farmers through various initiatives.

Through Growing Forward, federal, provincial and territorial (FPT) governments fund a broad range of business and skills development programs, designed and delivered by the provinces and territories. Some of these programs aim to enhance participation by young or new entrants. For example, in Saskatchewan, the Farm Business Development Initiative for Young Farmers helps farmers under the age of 40 adopt progressive farm business management practices and strategies in a number of areas including marketing and human resources, among others. In addition, Manitoba’s Succeeding Generations Program provides support for activities, such as mentoring and management training, to help young and beginning farmers develop and manage viable farm operations.

Agriculture and Agri-Food Canada (AAFC) also provides financial support to national organizations such as the Canadian 4-H Council, the Canadian Young Farmers’ Forum, and Canada’s Outstanding Young Farmers Program, to develop programs, tools and activities in support of young and beginning farmers as well as the youth.

Other AAFC programs and initiatives also benefit new and beginning farmers. Examples include AgPal, a web-based discovery tool that helps producers and other agriculture and agri-businesses find information on FPT programs and services relevant to them; and the Career Focus Program which provides employers with a subsidy of up to $20,000 for an agricultural internship to eligible recent graduates. The Canadian Agricultural Loans Act has special provisions for beginning farmers, and Farm Credit Canada also offers a number of loan programs to help young and beginning farmers get their operations up and running.

The Government will continue to promote training and learning opportunities, and support farm management services for young and new entrants to benefit and attract new participants to the sector.

RECOMMENDATION 14

The Committee recommends that the government report to the Committee on the actions it has taken subsequent to the report on the rail freight services review.

The Government acknowledges the Committee’s request for information on the actions it has taken subsequent to the report on the rail freight services review.

The Government has completed a facilitation process, involving the railways and shippers, to develop a template service level agreement and a commercial dispute resolution process. The facilitator’s final report was released on June 22, 2012 and is available on Transport Canada’s website.

Agriculture and Agri-Food Canada (AAFC) has established a Crop Logistics Working Group to provide a forum for the agriculture sector to input into the rail freight service review implementation process, and discuss other transportation related issues.

In addition, Transport Canada and AAFC are completing a grain supply chain study that will focus on issues affecting the grain sector and identifying potential solutions, with a final report to be submitted by fall 2012.

The Government has also committed to tabling a Bill in 2012 that will give shippers a right to a service level agreement with the railways and provide a process to establish an agreement when commercial negotiations fail.

Finally, the Government will launch in the near future the Commodity Supply Chain Table to provide a venue for commodity exporters, including agricultural exporters to identify ways to enhance the performance of supply chains.

RECOMMENDATION 15

The Committee recommends that the government investigate the current condition of the existing fleet of Canadian grain rail cars, and begin to plan for updating the current fleet with a more modern rail car that will increase the efficiency and productivity of the government’s rail car fleet while decreasing the overall environmental footprint.

The Government agrees with the importance of reviewing the Government’s existing fleet of grain rail cars to ensure they are efficient and productive in moving farmers’ grain, and decrease the overall environmental footprint.

In 2007, the Government signed new agreements for the refurbishment, maintenance and operation of its hopper cars with both Canadian National (CN) and Canadian Pacific (CP), which included obligations of the railway companies to replace hopper cars that reach the end of their useful life at the railways’ expense.

Besides refurbishing the hopper cars to extend their useful lives, the railways have been buying larger capacity hopper cars to replace the smaller capacity government cars. This generates increased efficiencies throughout the operation of the grain fleet.

Under the new operating agreements, the railways are required to report annually on their use of the government owned hopper cars. The 2011 annual report indicates that 9,400 Government of Canada hopper cars used in the CN and CP railways’ fleets are in overall good condition.

RECOMMENDATION 16

The Committee recommends that the government continue to support the supply management system by defending it in trade negotiations.

The Government agrees with this recommendation and continues to make it clear that it supports the supply management system in the dairy, poultry and egg sectors. In all international trade negotiations, the Government promotes Canada’s interests across all sectors to create more jobs and greater prosperity for Canadians.

Canada’s supply management system has not prevented the Government from concluding ambitious free trade agreements or from pursuing important new trade agreements with other trading partners.

RECOMMENDATION 17

The Committee recommends that the business risk management suite of programs of Growing Forward 2 respect the principles of transparency, simplicity, timely payments, market neutrality and nationwide equality, and better reflect the needs of farmers.

The Government acknowledges the recommendation and recognizes the importance of transparency, simplicity and timely payments, as well as market neutrality and equity in the design and delivery of agricultural programs.

At the same time, AgriStability is a program based on the operating margins of individual business operations and, as such, will likely always have a level of complexity that will lead to timeliness and predictability challenges.

In collaboration with the provinces and territories, the Government will be striving to ensure that all programming under the GF2 framework reflects the needs of farmers and positions the industry to be innovative and market-oriented over the long-term.

The federal government will work with its provincial and territorial counterparts to ensure that programs are designed and delivered in a manner that are, to the extent possible given their objectives, transparent and simple, that payments are issued in as timely a manner as is possible, and that programs reflect the principles of market neutrality and nationwide equity.

RECOMMENDATION 18

The Committee recommends that AgriStability be reviewed with the provinces and territories following the principles enunciated in recommendation 17.

The Government agrees with the need to review AgriStability to respect the principles of transparency, simplicity, timely payments, market neutrality and nationwide equity. The federal government strives for continuous improvement in all areas of program design and administration.

Concerns have been raised by the industry regarding the complexity, timeliness and predictability of AgriStability. The Office of the Auditor General, among other commentators, has noted that there is a need to better communicate to producers the program design trade-offs and inherent challenges for delivery. A program based on operating margins of individual farm operations will always have a level of complexity that will lead to timeliness and predictability challenges.

The Government, in collaboration with its provincial and territorial counterparts, will continue to review AgriStability and other Business Risk Management programs with regard to their ability to respect the key principles identified in Recommendation 17.

RECOMMENDATION 19

The Committee recommends that AgriRecovery’s disaster relief framework include a clear and meaningful definition of “disaster” with specific criteria so that relief can be delivered consistently across the country.

The Government acknowledges this recommendation and will take it into consideration as it develops the next policy framework, Growing Forward 2 (GF2), in collaboration with its provincial and territorial (PT) counterparts.

In the current suite of Business Risk Management (BRM) programming, AgriInsurance, AgriStability and AgriInvest are designed to be the first lines of defence for farm operations. The AgriRecovery Framework is a mechanism to be used for the development of initiatives that work with the other existing programs to effectively respond to “disaster events.” The current guidelines define a “disaster” as a natural event (e.g., weather, diseases and pests) that is collective in scope and has had, or has, the potential for significant negative impacts on a sector. Using this definition, the Framework has enabled Governments to provide meaningful assistance in times of disaster.

The federal government will work with its PT counterparts, as part of the renewal of the BRM suite of programs under GF2, to pursue opportunities to further refine how and when the AgriRecovery Framework will be used to respond to disasters.

RECOMMENDATION 20

The Committee recommends that Agriculture and Agri-Food Canada study the possibility of establishing price insurance programs across the country.

The Government agrees with the recommendation of studying the possibility of establishing price insurance programs across the country and expects to be seeking expert and stakeholder input in this issue in the near future.

Agriculture and Agri-Food Canada has been studying the potential risks, benefits and costs of price insurance in Western Canada, in collaboration with provincial and territorial governments. Alberta is currently administering unsubsidized price insurance programs for cattle and hogs, and federal, provincial and territorial (FPT) governments have been assessing the feasibility of administering similar programs in other provinces and whether there would be sufficient demand.

Furthermore, in the Saint Andrews Statement in July 2011, FPT Ministers of Agriculture identified the development of insurance-like approaches and private risk management tools as a priority area under Growing Forward 2.

The Government is thus committed to reviewing all types of insurance-based risk-management tools, in collaboration with its provincial and territorial counterparts.

RECOMMENDATION 21

The Committee recommends that Agriculture and Agri-Food Canada review the Advance Payments Program to consider the possibility of providing more flexible repayment options.

The Government agrees with the Committee’s recommendation that Agriculture and Agri-Food Canada (AAFC) undertake a review of the Advance Payments Program (APP) to consider the possibility of providing more flexible repayment options.

The purpose of the APP is to improve marketing opportunities for agricultural products of eligible producers by providing advances to them as a means of improving their cash-flow, with the understanding of guaranteed repayment. The APP is not intended to provide long-term loans to producers.

As per the legislation, AAFC is currently conducting a five-year review of the Agricultural Marketing Programs Act, which encompasses the APP. As part of the review, broad stakeholder consultations have taken place across the country. All ideas and viewpoints will be reviewed and analyzed and will provide a basis for possible program adjustments going forward.

It is the Government’s goal to identify potential improvements to the APP, while respecting the core principles and parameters of the program.