Key Issue: Business Risk Management

Issue Overview

Farmers need flexible programs to help manage risks beyond their control.

While agriculture is one of Canada’s main economic pillars, it is also a high-risk business. Farmers must regularly balance decisions based on volatile prices, unpredictable weather, and a global market influenced by geopolitical risk and government support to competing producers in other countries. Many of these risks represent challenges beyond the farmer’s control.

To reach its full potential, the Canadian agriculture sector needs a stable economic foundation that can withstand the pressures of a shifting global and domestic trade environment. To manage risks that can’t be addressed through on-farm practices, Canadian producers participate in business risk management (BRM) programs that support them in adapting to evolving markets, facilitating investment in response to future opportunities and acquiring technological innovations. Several government programs help them to meet these needs:

Quick Facts

Canadian farmers and ranchers are at a significant competitive disadvantage, given the level financial support currently available to their counterparts in the US and EU.
Taking all subsidies into account, total public support of agricultural income reached 38% of agricultural income on average in the EU.
In the US, government support accounted for almost 40% of farm income in 2020.
The risk profile of many sectors in agriculture has increased dramatically over the past five years due to climate change, trade wars and supply chain disruptions.
AgriStability, the primary risk management program for producers facing severe income losses, is seen as overly complicated and providing an inadequate level of support for producers in need.

Click here to view CFA's submissions on Business Risk Management programs