The Harper government has followed through on its election promises with two new programs that it says will put $1.5 billion into farmers' pockets.
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Federal Agriculture Minister Chuck Strahl announced Thursday that the government plans $950 million in new support for Canadian farmers as part of its long-promised reform of federal income-stabilization programs.
Farmers will have to wait until the fall before the money starts to flow, however.
FROM MAY 2, 2006: Tax-cut budget delivers on PM's promises
The new funding is meant to address longstanding weaknesses in the Canadian Agricultural Income Stabilization program (CAIS).
"I have heard from farmers across the country that CAIS is not working for them," Strahl said.
In a separate announcement, he proposed "practical changes" that would give farmers an additional $600 million through better cash-advance programs.
Among the changes:
The government plans to double to $100,000 the amount farmers can borrow interest-free to get their crops going this spring, and will also extend the repayment period. Limits on cash advances will be raised to $400,000 from $250,000, and the cash-advance program will be expanded to include livestock and more crops. Disaster relief will be separated from income stabilization. Some calculations will be retroactive to 2003. More farmers will become eligible for the kind of benefits that until now have been offered through CAIS.
Income-stabilization programs are government-backed insurance programs that bolster farm incomes during bad years. Farmers pay into the insurance schemes during the good times and receive payments when crops fail or prices fall.
The new program will be simpler and more predictable than methods used in the past, Strahl said, referring to programs that are notoriously hard to understand and complex to administer.
"These changes will better address the losses producers have experienced, and put significantly more money into the hands of more farmers this year," the minister said.
Strahl had vowed to improve the income-stabilization programs during the past election campaign, and followed through with hard numbers in the recent budget. The Tories have allocated a total of $1.5 billion to agriculture programs, he said.