Is the Ag Policy Framework living up to its potential?

Federal, provincial, and territorial agriculture ministers celebrate reaching an agreement on the Sustainable Canadian Agricultural Partnership in July 2022.

This op-ed was written by Tyler McCann, managing director of the Canadian Agri-Food Policy Institute, and it coincides with the launch of the new Ag Policy Connection podcast. Episode 1 focuses on the origin and future of Canada’s Ag Policy Framework. You can listen to it here, on Spotify, or in any podcast app.

Whether you call it the Sustainable Canadian Agricultural Partnership (SCAP), Growing Forward 4, or the Agriculture Policy Framework (APF), the fact remains that the agreement between Federal-Provincial-Territorial (FPT) governments has a tremendous impact on Canadian agriculture. If you think Canadian agriculture could do more and go further, demanding more out of the APF is a good place to start.

These 5-year agreements are the core of how governments spend money on the sector. Programs within the agreements include business risk management (BRM) programs, on-farm environmental programs, investments in R&D, market development, public trust, capacity development and more. However, getting more out of the APF has been a challenge. For example, the deal announced by FPT governments in July 2022 included $500 million in new spending, but it was the first-time spending increased since the end of the first Growing Forward in 2012.

It’s not just the budget that tends not to change. Most programs within the agreements have remained the same, with marginal tweaks every five years. Most of the tweaks in the latest APF reflect a federal focus on improving environmental outcomes and include better funding terms for research targeted at reducing emissions.

If the sector wants to see more substantial change in the agreement, whether it be increased spending or better programming, it is essential to understand what the APF really is, how it came to be, and the alternatives.

Understanding what the APF includes is more difficult than it should be. For example, governments refer to SCAP as a “$3.5-billion, 5-year agreement.” That $3.5B includes $2.5B in cost-shared programs, mainly delivered by the provinces, and $1B in federal-only initiatives.

However, the ag policy framework costs much more than that. Agriculture and Agri-Food Canada forecasted that it would spend $1.7 billion on “sector risk” in 2022-23, almost half of the department’s budget. Most of that goes to BRM programs within the APF, most of which goes to crop insurance premium subsidies.

Including provincial spending takes the forecast cost of BRM programs up to $2.8B in 2022-23. Therefore, one year of risk management programming costs more than 5 years’ worth of strategic, proactive investments made by FPT governments. Including BRM spending makes the SCAP worth $16 billion over 5 years, not $3.5B.

It is also important to understand history. The SCAP agreement represents the fifth successful negotiation of an APF. The fact that governments reached an agreement on schedule, without much drama, can make it look like getting an agreement is easy. But it wasn’t always this way.

The process of getting to the first APF was an almost 15-year battle and was driven by a growing reality that the status quo was no longer acceptable. The pre-APF status quo reflected competition between provinces that created an un-level playing field, program spending that was deemed too costly and not sustainable, and changing international dynamics with the conclusion of the Uruguay round negotiations and the creation of the World Trade Organization.

These pressures created the need for a more financially sustainable, more predictable, more trade-compliant funding arrangement. While the arrival of the first APF took the pressure down and took many of these pressures out of the headlines, the pressures still exist. Any changes to the APF will also need to manage these historical pressures too.

Finally, it is important to consider what the alternatives could be. The previously mentioned pressures, and the reality that agriculture is a shared responsibility between provinces, do not leave many options.

One alternative could be to make the APF an actual policy framework, putting more meaningful strategic direction into the FPT agreement. While the P in APF stands for “policy,” it probably should stand for “program.” Most of the negotiations, agreement and attention is ultimately focused on program spending. The agreement’s strategic priorities and policy commitments are extremely broad and effectively represent something that everyone can agree to, rather than a meaningful policy direction for Canadian agriculture and food.

It is worth considering whether the sector could get better outcomes from the APF if it was an actual policy framework, and what would be required to make that a reality.

The APF is of critical importance to the sector and could be key to delivering better outcomes, and it warrants more attention. That is why it was chosen for the first episode of the Ag Policy Connection, the new podcast from the Canadian Agri-Food Policy Institute and RealAg. The podcast aims to connect the dots on important policy issues, explain how big decisions were arrived at, and look at the impact of those decisions.

Hopefully, these episodes will encourage more attention, reflection, and debate on ag policy in Canada. The ag policy framework deserves more of all three.

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