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Consumer perceptions _ acceptance of functional foods

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Consumer perceptions _ acceptance of functional foods Powered By Docstoc
					       Who Will Participate in the
         New BRM Program ?

Rakhal Sarker, Shashini Ratnasena and Farzana Enam Rasna
     Department of Food, Agricultural & Resource Economics
                      University of Guelph

                       October 26, 2012
                          Introduction
• Canada has a long tradition of Safety Net Programs
    –  Originally designed to protect the income of efficient producers
• The design & richness of the programs changed through time to
  accommodate changing needs of the agri-food sector
    –  ASA (1958)           ASA(1975)          FIPA(1991)         GRIP & NISA
    –  APF           CAIS
    –  GF1            BRM- AgriStability
    –  GF2            BRM2-AgriStability (R)

                                       Perceived 
• Richness of the program                                    Participation 
                                       benefits to 
                                                                 rate
                                       producers
• More producers participate, the higher the sample size for relevant
  data
                                                                          2
Key Features: Current vs New BRM Programs




                                            3
  Figure 1(a): AgriStability Payment Tiers               How Does the Current AgriStability
                 2008-2012                                       Program Work?
                                                    Consider two Farms with very different sizes 
                  Reference Margin                  growing Grain & Oilseed in Ontario. 
                  No Coverage          100%                               Farm 1       Farm 2
Tier 1        Replaced by AgriInvest
                                       85%        Ref. Margin            $50,000.00   $1,000,000.00
Tier 2                    70%
                                                  Current Margin          $5,000.00    $100,000.00
                                       70%
                                                  Total Loss             $45,000.00    $900,000.00
                                                  Loss in Tier 3         $30,000.00    $600,000.00
                                                  Loss in Tier 2          $7,500.00    $150,000.00
Tier 3                   80%                      Loss covered
                                                                          $7,500.00    $150,000.00
                                                  under AgriInvest
                                                  Government Share of AgriStability Payment:
                                                                Tier 3   $24,000.00    $480,000.00
                                       0%
                                       Negative                 Tier 2    $5,250.00    $105,000.00
                            60%        Margin
                                                  Total Payments         $29,250.00    $585,000.00
                                                                                                4
    Figure 1(b): Cost sharing under                                                  How Will the New AgriStability
    AgriStability in Growing Forward agreement                                             Program Work?
    2013-2018                                                                     Consider two Farms with very different sizes 
                  Replaced by AgriInvest  100%                                    growing Grain & Oilseed in Ontario. 
                (50:50 cost share) & other 




                                                    Producer’s Reference Margin
                  private risk mgt. tools 
Cost share 
 as current                                   70%
      year 
    margin                 AgriStability
  declines       30%
     below                     70%
               Producer
 reference                 Government
    margin       share
                              share



                              70%
                                              0%
                30%                           Negative
                           Government         Margin
               Producer
                             share
                share 


                                                                                                                          5
                           Results
       Number of Farms Qualified/Expected to Qualify to Receive
AgriStability Payments under the Current & New BRM Program Structures




                                                                 6
                        Results
• In aggregate, fewer farms will qualify for the new 
  BRM program payments in Ontario. The  rate of 
  decline, however, will vary across sectors.
   – The largest drop is expected in the grain & oilseeds 
     sector (37.3%)
   – The second largest in beef (14%)
   – The smallest drop will be in Hog sector (13%)




                                                             7
       Results- Grain & Oilseed Farms
Figure 2: The Eligibility Rate of Receiving AgriStability Payments under
                Current & New BRM Program Structures




     Small                         Medium                      Large




                                                                           8
        Results: Farms’ Participation in
        Current & New BRM Programs-
            Grain & Oilseed Sector
• Considering the size categories, the largest 
  adjustment will take place in hobby, small, large & 
  very large grain & oilseed producers




                                                         9
                   Results- Beef Farms
Figure 3: The Eligibility Rate of Receiving AgriStability Payments under
                Current & New BRM Program Structures




       Small                         Medium                      Large




                                                                           10
       Results: Farms’ Participation in
       Current & New BRM Programs-
                  Beef Sector

• Most of the drops will take place in small sized 
  farms
• The medium & large sized farms will be relatively 
  less affected by BRM2




                                                       11
                  Results- Hog Farms
Figure 4: The Eligibility Rate of Receiving AgriStability Payments under
                Current & New BRM Program Structures




       Small                         Medium                      Large




                                                                           12
       Results: Farms’ Participation in
       Current & New BRM Programs-
                   Hog Sector
• Since hobby farms practically disappeared from the 
  hog sector, the new BRM program will not have any 
  impact on these farms
• All other hog farms are likely to be less affected by 
  the new BRM program




                                                      13
               Concluding Remarks

• Fewer farms will participate in the new BRM 
  program
• The extent of drop varies widely across sectors
• Grain & oilseeds sector will be affected more than 
  beef or hog sectors in Ontario
   – Hobby, small, large & very large farms will be more 
       influenced than the mid-sized farms
   – Beef & hog sectors, the drops will be small among
       mid-sized and large farms

                                                            14
               Concluding Remarks

• Only a few large farms will participate
• Will limit agencies’ ability to receive readily available 
  data from the growing & increasingly more relevant 
  segment of Ontario agriculture

          
          “Past is not always a good predictor of the future”

                                                                    
                                                          15
THANK YOU
  Happy to answer any questions




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