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As part of the federal and provincial government's Agriculture Policy Framework's business risk management component, the new Canadian Agriculture Income Stabilization (CAIS) program is designed to provide Canadian farmers with a reliable and long-term income disaster program.
CAIS replaces all other programs including the Net Income Stabilization Account (NISA) and Canadian Farm Income Program (CFIP). That's why we are focusing this entire issue of Agriculture Business Review on this important new program. We believe that Canadian producers need to know how the program works and how it will affect their choices as they formulate their risk management plans.
CAIS – A new direction for Canadian farmers
The CAIS program is part of the federal government's Agriculture Policy Framework's Business Risk Management component. The overall objective of CAIS and Production Insurance is to protect farm operations from both small and large drops in income. As well, the program aims to provide equal treatment to all farmers no matter where they live or what commodities they produce. Equally important is that farmers just starting their businesses have access to business risk management programs at the beginning of their careers.
When designing the program, Agriculture and Agri-Food Canada and the provinces analyzed the different farm types across Canada. Analysts looked at 250 different possible conditions on those farms by changing yields, expenses and prices. The result was over 60,000 combinations of possible scenarios on those farms. When the new stabilization program was tested using these scenarios, they found that it performed better than existing programs.
From there, analysis was done using previously collected data from 104,000 actual farms. When the CAIS program was tested, it showed that farms had more predictable and stable margins under the new program as compared to current programs.
According to an independent assessment done by IBM Consulting and the George Morris Centre, "CAIS would do a better job than current programs of stabilizing producers' incomes across commodities."
CAIS is part of the Business Risk Management component of the Agricultural Policy Framework (APF) which has been in the works since 2001. The framework itself is built on five elements: Business Risk Management, Environment, Food Safety and Quality, Renewal and Science, and Innovation. The goal of the APF is to help Canadian agriculture take advantage of new opportunities in world markets.
According to Minister of Agriculture and Agri-Food Bob Speller, "No other country can lay claim to such a cohesive and integrated policy approach to agriculture. For Canada, there will be international recognition as the world leader in food safety and quality, environmentally responsible production and innovative products."
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