Unpacking SCAP: Some carrots, some sticks, and plenty yet to be determined

Sheep drinking at, but not walking into, the creek. Photo credit: Lyndsey Smith, 2017

On July 28, the federal, provincial, and territorial ministers met to hammer out an agreement-in-principle for the next version of the ag policy framework (APF).

Beginning April 1, 2023, the next version will be called the Sustainable Canadian Agricultural Partnership (SCAP), and will include some big changes from the current version, including more total funding and connections to environmental programs and deliverables.

It’s early days yet in what the final programs will look like, but to break down what we have learned so far is Steve Funk of MNP.

“I liken this to back in high school, when you wrote an essay, they taught you to write an outline first. And that’s what the federal, provincial, territorial ministers did, is they are basically giving us a rough outline of what’s to come in this new framework agreement here,” Funk explains.

In the coming months, the real work begins in to writing the actual “essay,” but there are some changes we already know about, including a change to the contribution rate under AgriStability.

Funk explains that the contribution rate moving from 70 per cent to 80 per cent doesn’t change where the program triggers — you still need a 30% drop in margin relative to the farm’s history in order for benefits to trigger — but the number of cents you get on the dollar increases, once the program triggers.

This means it’s just as important now, as before, that farmers understand what the farm margin is, what it’s comprised of and what kinds of production or price decreases might trigger payment — and that’s different for every farm.

There will be more changes to come, Funk says, including a push for more simplicity, which he says could actually make the program less farm-specific, but perhaps faster to deliver support. (Story continues below interview)

“I’ve heard people say about AgriStability, they don’t like the fact that it’s a one size fits all model. And what they might not be recognizing is that AgriStability is actually a smart program; it is completely tailored to their specific farm. If it was a missile, it would be heat-seeking. Now as we go to a simpler, faster and more predictive model, we take away some of that tailoring to the specific farm. I think you have to start relying on benchmarks and things like that in order to simplify the program, make it faster, etc.,” he says.

When it comes to environment and climate change, there are both carrot- and stick-type approaches within the general outline of SCAP.

Farms of a certain income level will have to complete an environmental risk assessment in order to access AgriInvest dollars, which is a bit of a stick. The carrot comes in the possibility of enhanced business risk management benefits for complying with certain objectives, however Funk says we have some but not all of the details on this front yet.

“We already know that one [of the goals] as a reduction in emissions of which the government has already set an initial target of 30 per cent on fertilizer emissions. They also said in there that there’s going to be a one-year review of business risk management programs, to explore opportunities to further integrate climate risk to identify incentives and conduct a pilot for producers to adopt who adopts certain environmental practices that also reduce production risks.”

The big question, and one that has come up several times in the past few months as the government rolls out direct funding for so-called climate action projects is that it appears that only those people who are implementing these things from here on in will benefit. Early adopters or those who have been doing the “right” things all along won’t necessarily see an incentive to do so.

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