Due to the complexity of government subsidy and funding programs and the many steps involved in applying for them, farmers don't always take advantage of the opportunities available to them. In some cases, farmers who already rely on one program mistakenly believe that there's nothing else out there for them. That may not be the case, however.
Because it's not always simple to find and take advantage of those opportunities, however, it's important to consult with a financial advisor who has stayed up-to-date on the ever-changing program options.
These programs can be broken into two categories:
1. Straight subsidies
With subsidy programs, the government provides you with cash to address a specific financial difficulty. One relevant program that all farmers across the country should be enrolled in is AgriInvest, which works like an RESP. You set up an account at the bank, deposit money and the government matches a percentage of your contribution, based upon a calculation of certain income items less certain variable costs. Just about every farmer should be enrolled in this program.
Ontario also has the Risk Management Program (RMP), which gives farmers financial support if the sale price for their commodity falls below the cost of production. Another Ontario program specific to the horticultural industry is self-directed risk management program (SDRM). Similar to AgriInvest, the government matches contributions that you make. Another option is AgriStability, which gives you a subsidy if your overall business income falls below a certain average of your income in previous years.
2. Funding for business improvement
In addition to subsidies, farmers can benefit from funding for business improvement. For example, if you treat your manure using an outdated method that's not as good for the environment, the government may provide subsidies that will cover some of the cost of updating your equipment. Another example is when you transition to the next generation, which usually requires the help of professionals. The cost of employing accountants, lawyers and other advisors can get expensive—and government funding can help cover those costs.
The primary program for funding business improvement is Growing Forward 2. This program funds specific projects that the government feels are important, including any related to environment and climate change adaptation. Traceability is another improvement that government may support. This is the ability to trace what you buy at the grocery store back to a specific farm. If you buy a steak that has a traceable label, you can go online, punch in a code and find out exactly where it came from, allowing you to confirm that it meets your quality standards. Animal welfare—providing better housing facilities for animals—has also been known to attract funding. When you take a closer look at these initiatives, you will see that they are often the kinds of improvement that you would be considering anyway, so you should always check to see if you qualify.
The future
In the past half decade, the government has been moving away from direct subsidies like AgriInvest and AgriStability. It used to be a lot easier to qualify for these programs and there was a lot more money available to farmers. Meanwhile, the government has thrown additional money at the Growing Forward 2 program. Instead of providing direct subsidies, they want to improve the management of operations, modernize the industry and encourage farming businesses to be more environmentally sound. Consider how such initiatives might relate/support your current practices or future plans and be sure to explore all your options. Almost all Canadian farmers have more opportunities available than they realize.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
