Managing farm risks

By Gary Sliworsky
OMAFRA Rep.

Announced in the 2011 budget as a permanent program, Ontario’s Risk Management Program (RMP) helps farmers manage risks beyond their control, like fluctuating costs and market prices. The program is available for the cattle, edible horticulture, grains and oilseed, hog, sheep and veal sectors. RMP complements AgriStability and Production Insurance. AgriStability was designed to stabilize whole farm income and Production Insurance was created to mitigate production loss. RMP is comprised of three major components: an RMP program for Livestock; RMP for Grains and Oilseeds, and a Self Directed Risk Management Program (SDRM) for the edible horticulture sector.
After nearly a year of positive dialogue between the commodity organizations participating in the provincial Risk Management Program and Self Directed Risk Management Program, the Ontario Agriculture Sustainability Coalition (OASC) is pleased to announce the continuation of both programs with some modifications to ensure that the programs adhere to the $100 million spending limit outlined in the 2012 provincial budget.
The Honourable Ted McMeekin, Minister of Agriculture Food and Rural Affairs, has notified OASC commodities that the Ontario Government has accepted the Coalition’s proposal to modify Ontario’s Risk Management Program (RMP) for livestock and grains and the Self Directed Risk Management Program (SDRM) for edible horticulture beginning in the 2013 program year.
Much of the program design for both RMP and SDRM remains unaltered. However, there are two significant changes within the program to note. Firstly, premiums will now be retained year over year in a separate, commodity-managed fund to address years when provincial funding is not enough.
Secondly, work has been done by commodity leaders to ensure that although the programs are capped, a mechanism is in place to allow the funding to address the greatest need.
The creation of the RMP Premium Fund is seen as an important innovation. For the first time, premiums collected will be held for farmers and not paid into the general revenues of the province. This positive change will allow unneeded premium funds in good years to be saved for the year when they are needed most.
The Self Directed Risk Management program for the edible horticulture sector will essentially remain the same, however as with RMP, payments may need to be prorated should the funding allocation for edible horticulture be insufficient to cover a fully funded program
Program materials including applications and handbooks will be available in the spring. Individual commodity organizations will be providing additional information to their members in the near future. Please check with your commodity association or agricorp.com for updates.