May 18, 2006

Ottawa - Gord Brown, Member of Parliament for Leeds-Grenville, says the government is moving forward with the pledges it made to Canadian farmers.

Minister of Agriculture Chuck Strahl today announced a budget commitment to address weaknesses in the Canadian Agricultural Income Stabilization (CAIS) program that will provide $950 million in new support to Canada's producers.

The changes are:

• adjusting the inventory valuation calculation retroactively for 2003, 2004, and 2005;
• expanding the eligibility criteria for negative margin coverage under CAIS.
  

"I have heard from farmers across the country that CAIS is not working for them, and I have committed to working with my provincial and territorial colleagues to replace it with separate income stabilization and disaster assistance programs that are simpler, more predictable and bankable," says Strahl. "These changes will better address the losses producers have experienced, and put significantly more money into the hands of more farmers this year."

"The government is committed to replacing CAIS with a new program that separates disaster relief from income stabilization," adds Brown. "It is working with the provinces and territories to include these changes to inventory valuation and negative margin eligibility as a new income stabilization program is developed."

Payments resulting from these changes to the CAIS program are expected to flow beginning this fall.

After making the inventory valuation adjustment, the CAIS applications that producers have submitted for 2003, 2004 and 2005 will be recalculated. If producers are entitled to more money after the recalculation, they will receive additional payments. This initiative is a one time federal government injection of $900 million.

The $50 million in federal funding for negative margin changes for 2005 and 2006 is part of the annual increase announced in Budget 2006. Negative margins occur where expenses exceed income. This change will be cost-shared with provinces and territories, and will result in more farmers with negative margins due to back-to-back disasters being eligible for CAIS payments.

The $950 million announced today is part of this government's $1.5 billion agriculture budget commitment.

For more information on these changes, producers should call the toll free 1-866-367-8506 or visit www.agr.gc.ca/caisprogram.

Earlier today the minister announced the details of the Enhanced Spring Credit Advance Program (ESCAP), a budget commitment to ensure producers get access to more money starting this spring.

The program will:

• Double the loan maximum for spring advances to $100,000
• Keep the loans interest-free
• Extend the repayment period to September 30, 2007
  

"Doubling the interest free loan limits and extending the repayment period are practical steps we're taking to help farmers this spring," says Strahl. "These programs are good for producers because they are straightforward and bankable. The improvements mean more cash flow to farmers to help ease the immediate cash crunch of spring planting."

Producers who have already taken their advance through the Spring Credit Advance Program (SCAP) will have the option to transfer their 2006 SCAP advance to ESCAP in order to take advantage of the higher interest-free limit and extended repayment period.

To implement these enhancements, Agriculture and Agri-Food Canada will immediately begin working with farm organizations that administer the SCAP.