CAIS

[skhadenuf]

Not trying to be sarcastic but why are we not demanding Cais be scrapped immediately. I just can't see why we are letting this massive waste of unproductive costly bull go on.
For cattlemen and grain farmers alike this program serves no one that gets hit by poor weather or circumstances and then has those margins stay with them for years after. It's totally bizarre to have any insurance based on that formula.
For those that do not believe in government help then why not blast this program, for those that do but yet are not recieving much more than an accountants bill at the end of hours upon hours of pissing around with bogus numbers. With people collecting because let's face they are dam well cheating the program, yes I said it we have that right here 2 guys same yard one gets all the crop on paper for 3 years builds margin the other collects after the three years they reverse, fertilizer dealers that farm using bogus bills for inputs. Massive cost for all those employees now not to mention the future cost of retirement income to those people. And for what honest guys going broke left and right.
Cattle and grain farmers both on the brink need something immediately before we loose any more, that,s not going to happen as long as this program is in place because our so called leaders are proclaiming to the public this program works.
Money injection is not the long term solution but neither is no money in short term while so many are driven out.

I support you cattlemen fully but why are you not demanding the end of this bullshit I don't get it!

[kato]

I've written to G.Ritz numerous times on this, and he responds by telling me.....

"Canada's business risk management (BRM) programs continue to provide real financial assistance to producers. I would like to highlight some of the support extended by our BRM programs to
Canada's cattle producers in addressing their economic challenges. For 2007 and 2008, more than $1 billion has been projected to flow to cattle and other livestock producers through the new
BRM programs.

*** I'd like to see where that went, because we sure didn't see any of it***

In introducing AgriStability, federal, provincial, and territorial (FPT) governments made a number of significant improvements over the former Canadian Agricultural Income Stabilization program, including the expansion of negative margin coverage. These changes have allowed many producers facing significant losses over consecutive years to continue to receive program coverage. The majority of 2007 AgriStability payments have been completed and payments for 2008
are ongoing. As of mid-December 2009, over $1.18 billion has been released for 2007 and 2008. A significant portion of this money has been paid to livestock producers.

I recognize that even with these changes, the losses for some producers have extended to the point where the program is not resulting in substantial assistance.

***pay attention to this next part, it explains the intention of this program*****

It should, however, be noted that although AgriStability provides some cushion from market forces, it is intended to allow market signals to be passed on such that industry takes the needed action at the farm level to improve its long-term competitiveness.

*** in other words if you have more than three bad years in a row, you do not deserve to stay in business***

Although individual farm experiences vary, on average reference margins in the sector do remain positive, resulting in the program continuing to provide assistance."

.....So, until every farmer in the country is in a negative margin position, everything is just fine. What doesn't show up here is the fact that those margins are based on those so called "allowable expenses", which are no where near to being actual expenses... Which brings me to one of my pet peeves, why is machinery repair not an allowable expense? I've never been able to understand the logic behind that one, especially when it takes a very small repair to cost thousands of dollars.

I will admit this program helped us a lot in the first year, but it's been all downhill from there. Maybe it would have been better not to have gotten anything back then, and we would have known right then that the right thing to do was to sell out right after the border closed. In hindsight it sure would have saved a lot of stress and sleepless nights. As it was, we took the carrot, and pounded on hoping for better days that did not come.

I agree with you. This program needs to be scrapped, and it needs to be done now. There has got to be a better way.

[skhadenuf]

Very good information, pretty much sums up alot of things. When you look a little deeper also 1.15 billion for 2007, I'd like to see the breakdown of what that includes wages, studies, and how much actually in the farmers hands, because there sure hasn't been much around this area, but our area has had multiple crop loss and so no averages, and he doesn't care about that. also that's 2007 this is 2010 so much for responsiveness.
Do you know is there somewhere that gives the breakdown of what is paid out what is collected back etc.?
Also he says the average farm has a positive margin, does that mean that about 50% of farms don't? That's scary because as you noted all income is included but not all expenses such as repairs, land rent, land payments, interest is not included, so basically what would it be 75% of farms loosing money?
The program needs to go, he needs to go just as badly, I think what you have listed demonstrates he is not willing to look any further than the program and he as you said only wants to help those with a minor gltch in loss revenue not areas with major disasters. He obviously doesn't seem to give a dam about the industry and more importantly the people and communities being affected, has zero vision other than touring the world accomplishing nothing ie china canola, cattle markets etc, a total flop.
I think rallies protests etc. directed right at getting rid of him as minister or actually right out of politics, should be centre stage bring out all the numbers of lost cattle and grain farmers, show how much this program costs to run.

[skhadenuf]

I can understand each of your concerns about the program, especially if you have a significant livestock involvement.

My questions to you
1) If you could have a program that is going to solve your risk management, what would that look like?
2) If your program is better, would it include repairs, interest, rent etc?

I believe you each can have valid issues and concerns about the program but I ask you consider mine as well:

a) If you have a program that contains variable items you will have other issues. Take for example rent or interest. If your farm has rented equipment or land and debt and the next farm does not, how is that fair to include those items if the next operation does not have them.
b) How is it fair to include repairs when each farm is going to have different conditions, maintenance practices, age of equipment etc.

Theses "variable" costs are excluded to level the playing field between operations. The farms that have low repairs, low debt and interest, rented or owned land will not receive any more benefits from programs that any other farm.

It is the difference between production and the production costs that creates you the margin history and if your history is not representative, then are there other circumstance relating to that?
- What is your calf success ratio
- What are your feed costs per animal compared to others
- What is your fuel per acre/cow ratio compared to others
- Size - are you large enough to give it a chance to stand on its own and be profitable
- If grain is involved, do or did you carry crop insurance at maximum levels for high risk crops?
- Are your forms being prepared and assessed correctly and most important, if they were prepared by someone, what a reference margin calculated and a payment calculated that was later compared to the assessment of the administration?

Again, I am not trying to argue with your cause but do want you to look at it from an independent view. I am only a grain farmer and the program has served its purpose in the 2 years since 2000 that our farm experienced an income decline. I have a many friends that are livestock farms and we share certain financial data in our group. Although some express frustration, most are maintaining margins suitable to continue profitable. If its working for them, then why and what needs to be done for it to work for you? You may find its not necessarily the program but the historical mangement style and other things that make your farm different from the rest.

Not necessarily is what you have done in your past better or worse, but can explain differences

[kato]

To answer a few of your questions.

When the border closed, we were two years away from having the farm totally paid off. We have a high calf success ratio, generally top the market, wean large calves, have lower than average feed costs, extended grazing, and run all the cows that we can handle without hired help.

I think anyone who has a poor calf success ratio, high feed costs, fuel costs,etc. is already gone. Some of the producers dropping out now have some of the best run operations around.
You can do the best job possible, and it's just not going to do it. Prices have been too low for too long. To make it worse, Manitoba prices usually run between 7 and 10 cents per pound below Alberta, just due to geography. We have been hurt far more than Alberta over this American border trouble.

We talk with other producers too, and in this part of the country, no one is making a go of it. Even guys who were totally paid up in 2003 are bailing while they can still salvage some equity. Are your neighbours being honest with themselves about how much they are really earning?

You've had good results in the two years you had troubles. Exactly. Two bad years. That's what the program is designed for. What if you had two years of too much rain, then three years of drought, and then right after that the markets crashed for three more years. Would it still work for you? This is the problem with this program. It does not address the long term.

The thing that really gets me about the issues we cattle producers have right now is that the same government I've been told we shouldn't ask for help, is the one who is one of the main culprits in how this happened in the first place. There is a reason there is a class action lawsuit out there, and it's not just for fun.

If troubles came from real honest market fluctuations, and weather related issues, that would be one thing. But if an entire sector of agriculture gets wiped out because some government bureaucrat didn't feel like following up on a report that predicted this whole fiasco that is a totally different story.

I can see the logic of allowing market influences to work, but there comes a tipping point. Livestock production in this country is in danger of total collapse right now. We've seen grain production have big troubles in the past, and it's always recovered. The difference with livestock production is that when people get out, they don't go back in. They leave for good.

If our numbers drop enough, and we lose what infrastructure we still have left for processing, then the industry will not recover. And that's the bottom line.

end of rant. feeling better now...

[skhadenuf]

In a nutshell sask99 your pretty much saying myself, Kato and all the other thousands of farmers without decent margins are too stupid to manage our farms. Your in some kind of other world where cattlemen and grain farmers are rollin in it, and if I were you and had only 1 crop loss I sure as hell wouldn't be wasting time on replying to threads like this, what the f is your goal here, get a rise maybe out of putting other farmers down. We're looking for solutions here, you on the other hand sound too simular to ditz in attitude and everytime someone questions his ability there you are calling people stupid lazy on and on, like I said on another thread there is more to your story than your letting on.
Maybe your right we should maybe quit and go into the mirror business because I am sure ditz and you likely wear one out a week standing there admiring how smart you are amongst us idiots.

[grassfarmer]

Not a big supporter of Agristability by any means - apart from a 2003 payout it has been a complete waste of time for us. At the same time it's the least of our worries at the meantime. As far as I can see Government will p@@$ away money through one scheme or another and there is not much we can do about it. Yes it's a crappy situation that doesn't work for the vast majority of livestock producers - I suggest filing your own paperwork so you don't incur the accountant fees and wait and see if anything comes of it. Some of the newer programs/bailouts have been linked to Agristability so it's easier to stay in than to quit in my opinion.

[burnt]

GF, you stated the best and almost only reason to not opt out - future help may be linked to enrollment in the program. How handy would it be for gov't to say "Well farmers aren't making use of the program so they must not need it . . ."

We were surprised to receive a moderate-sized payment last fall but are almost expecting to have it clawed back since our calculations did not show a forth-coming payment. Our average margin is so low that we will be old and gray before it could work for us - well I should say much older and much grayer . . .

[skhadenuf]

I certainly respect your view and agree this is not the long term solution. But our ag minister is saying that nothing else is needed the market is just playing itself out. He's saying cows slaughtered at 15 to 30 cents is okey even if the packers to retailers are selling it at 3 to 4 bucks, that is just free trade working because packers and retailers can get this product outside the country cheaper. He's telling the public and producers don't worry the program will help you. Well it isn't working, the exact same thing can be said for grain producers it's just going at a different rate, the amount of young farmers in both the cattle and grain sector isn't that worrisome to anyone? Why do you think nielson's feel they can control the market now, it's because our governments have put all the rules of the game in their favor to do this all the time, they just got a little sloppy in a memo this isn't anything new. Mark my words nothing will come of this that is substantial detriment to Nielsons, there will be a slap on the wrist maybe a bit of mock public embarrassment but nothing will change unless we start right here with this program this minister and say NO this isn't working, NO we want a minister that actually supports sustaining the industry not a corporate puppy, NO we want things put in place at the producer level for a change.
And besides all that you both mentioned just stay with it in case in the future it will help. It takes 5 years of good returns to have a margin. I sincerely am glad that you will make it through the next 5 years, how many won't? And to say stay in it because additional programs may be attached, well why the hell pay for this huge cost of running this thing if we're gonna need ad hoc programs all the way along to actually mean anything. Hell why not get rid of the program and take all that wage income and put it into a producer owned packing plant etc.

[cpallett]

Better get used to it. More than half of the policy framework for Canadian agriculture released last year ( Growing Forward - http://www4.agr.gc.ca/resources/prod/doc/apf/pdf/GFFA_e.pdf ) is dedicated to the BRM (business risk management) suite of programs; AgriStability, AgrInvest, etc.

Contrast that with the recently released UK policy document called Food 2030 - http://www.defra.gov.uk/foodfarm/food/pdf/food2030strategy.pdf

I would particularly refer you to pages 29 and 30 of Food 2030.

You may not like the UK government's emphasis on the need to eat more fish or the need to be responsive to global warming issues, but I think you will have to admit that the UK approach appears to be a whole lot more well thought out.

[smcgrath76]

A few issues with CAIS...
For the intended purpose it is actually
a pretty good setup - the purpose as I
understand it is to help even out SHORT
TERM market fluctuations and weather
related issues. It does not deal with
long term concerns or DISASTERS. A good
example may be if GMO wheat is let loose
and the borders are closed to SK wheat.
That would be more than a market
fluctuation. The beef sector has been
lucky to have been saddled with BSE,
drought and extreme market
concentration, coupled with
protectionism from one of our most
important market.
I think CAIS was a risk management
program, but not a disaster program. I
think CFIA has impeded trade, been
unfair/inconsistent in its' dealings
with industry, government has been
extremely poor at trade negotiations,
and agriculture is totally off the
radar.
We have suffered from very poor
representation and inconsistent messages
from our own sector and have effectively
cut off innovation at the knees in terms
of market access, development of
processing capacity, and trade
agreements.
We are now being legislated to produce
to higher and higher standards with an
industry structure that will allow a
very select few to actually capture the
value from that investment. I think we
will see increasingly rapid
consolidation in Canada, and will become
like the poultry industry in the US.
The farmer will own the land and
facilities and produce on contract for
pennies per head per day. A few
innovators will target specific markets
(eg: local) and the family farm and
neighbourhood will basically be gone.
Unless there is a real public
determination that they want it to be
different, I don't see the status quo
changing. I do see opportunity around
the fringes and in the mainstream, but
it will look pretty different than
today.
FWIW...

[smcgrath76]

Well at least I received a decent response from kato and his points are valid. You, Hadenough on the other hand are no more than a constant complainer and must be the biggest negative person I have "never" meant. And as for the mirror comment, maybe it should be ... (I'm not going to be that immature)

Like I asked - what type of program are you looking for? What changes do you think will help/fix the issues? I did not intend to down play anyone.

I have a feeling hadenough, that the new program could send you a million every xmas and it would never solve your problems. Its just a constant limbo dance for you.

As far as your comment about secrets and the other blog we were debating, there are none. I'm sorry we have a had a bit of luck. Just like you can't believe many can do very well, others may not believe that rest are not able to follow the lead.

We do have packing plant issues and the ones that are in existence are eating up the profits which don't get to producers like yourselves. To me this is a much larger issue and the "programs"

When I mentioned management style, I was not referring to bad managers and nowhere in my post did it say that.

Management styles will include hundreds of things that make an operation different from the next. Its no different than non farming businesses. A few examples:

a) Tax management, which I think is a huge one and a large difference between farms. Every farm cranks out $40,000-80,000 (or more)in living, non deductible debt repmts each year - some choose to deal with the tax related to this, some choose to postpone or push this off. By pushing it off, you end up financing this in different ways through increased debt and then increased overhead.
b)Capital investment - Equipment costs per acre or per breeding animal - how do you compare to industry standards. There is a ton of information sites that provide information like this. Ones style is to run older, well maintained, others want new, each comes with a cost, a cost that compounds your returns positive or negative.
c) Second opinion - many of you express your frustrations with the program or your financial results - Are you interpreting them correctly. Do you have a balance sheet prepared sufficiently to capture your true net worth change or are you measuring it on cash flow and the bank account?

There would be a ton of others but like you said, "why waist my time"

Hopefully the rest of you find my two cents a but more appreciative

[burnt]

Saskfarmer99, you are so obviously working for the government or have your application in there for a job . . .

Your qualifications are obvious - so far removed from reality that it is sickening.

Yup, you are great civil servant material because you learned a long time ago the bullshit baffles brains.

CAIS, or whatever the latest version of this abortion of a farm program is called, is so ineffective that it deserves to be shot and dragged out the back so its rotten stench can no longer pollute the farming atmosphere.

I think I can safely speak for most if not all others when I say that I (we) don't want an effective farm income support program so much as I want a marketplace that actually discovers and returns the true value of what I am producing.

Furthermore, I am sick of seeing mega $ in the Ag budget being shoveled out to the inepts that administer these absolute bullshit programs that make the administrators wealthy while the supposed beneficiaries watch their lifetime savings and equity disappear down a damned rathole caused by concentration and corruption in the processing sector.

If you are serious about suggestions for improving returns, then start by addressing some of the problems I noted.

Or is reality too tough a concept for you to embrace?

[kato]

First off, I'm a her. LOL

a) Tax management. I don't think that taxes have been a weight around a lot of cattle farmer's necks lately.
b) Equipment. Let's put it this way, when we went to Ag Days in Brandon a few weeks ago, the joke was going around there that as soon as someone told a machinery salesman that they were a cattle producer, the salesman tuned out. Equipment gets bought when the old one is shot. And not a moment earlier. That's the way it works around our neighbourhood, anyway.
c) Since we're making so much money on the cattle that we don't know what to do with all the proceeds, I am now working for an accountant. I think I know my way around a balance sheet. In fact, I bet the cattle producers here have all prepared so many financial statements in the past 7 years that they can do them as well as many accountants.

The fact is that all the past years are adding up, equity is disappearing all over rural Canada, and it seems like no one cares. This has gone beyond a management issue. You can not get blood from a stone. You can be the best manager in the world, and you can't make it work after so many bad years in a row.

The dilemma is that our country is ignoring the fact that it's losing control of it's food security. If people think it's dangerous to be so reliant on exports, that is absolutely nothing compared to being reliant on imports. Our government seems quite content to put the availability of food for it's citizens in the hands of multinational corporations, factory farms, and imports from other countries. Consumers should be up in arms about this, but we can't even get a mention on the news.

[smcgrath76]

Kato, I would add to that...
The reason that the problem has been
well hidden is several fold...
1) there was a lot of equity out there
in 2003. It has been leveraged and
releveraged to provide cash (note I did
not say generate cash). Much of this
was done with some degree of faith in
government, however continually changing
messages and programs have eroded that
faith. It would likely have been less
painful to hear the brutal truth on day
1.
2) The issue affects all of Canada, but
ground zero is in rural Canada and there
are not a lot of Toronto Sun reporters
running around kato's neighbourhood
looking for a story.
3) the size and resilience of the farms
involved often lies in the fact that
they are smaller than huge and have
several enterprises. The additional off
farm income enterprise has been growing
by leaps and bounds in the farm
community. On an individual basis this
is just one more sacrifice, but it does
serve to hide the issues by bringing
much needed cash into a dire situation.
I think there is opportunity out there,
but with our current structure and state
of affairs we are severely limiting that
opportunity.