banner1 (49K)

The Program: Ontario Cattle Hog and Horticulture Payment (OCHHP)

In December of 2007, then Ontario Minister of Agriculture, Food and Rural Affairs, Leona Dombrowsky, announced a one-time payment to cattle, hog and horticulture producers. This ad hoc emergency program was designed to help these farmers manage the effects of lower returns due to higher input costs, the stronger Canadian dollar and lower market prices. In January 2008, hog and cattle prices were the lowest since 2001. For pork producers it was the worst economic circumstance of the last 60 years. Between June 2007 and January 2008 hog prices had collapsed by 43 percent.

The Government of Ontario announced this ad hoc farm program in December 2007 and committed to speedy delivery. The Ontario Cattle Hog and Horticulture Payment (OCHHP) was expected to send support to approximately 13,000 cattle, hog and horticulture producers. The province announced $150 million for the payments and related programs. Farmers did not need to apply for the payment.

Speedy Delivery—Ad Hoc Design

Starting in late February 2008, one-time payments were issued automatically to farmers. To be eligible farmers needed to be in the Canadian Federal Cost of Production Payment system. This payment system was based on a farmer's historical allowable net sales. The information in the system was old, dating from 2000 to 2004. Thus payments were issued based on a farmer’s historical allowable net sales from 2000 to 2004.

The goal of speedy delivery was met but the design was ad hoc, used four year-old data and did not have an appeal process—a design that left out beginning farmers.

The Handicap to Beginning Farmers

The structure of the Canadian Federal Cost of Production Payment system resulted in beginning farmers, primarily young farmers, not receiving an OCHHP payment or a sharply reduced payment. The actual 2007 farm production and sales of these farmers bore no resemblance to their historical average allowable net sales from 2000 to 2004. Some were not even in business during 2000-2004, giving them an historical average of zero. These farmers experienced the same financial crisis in 2007 as all the other cattle, hog and horticulture producers. But the program design did not include a process that would allow them to receive the ad hoc emergency payment based on their actual allowable net sales during the crisis—the period in 2007 when hog prices collapsed 43 percent.

To top

There were
solutions proposed ...

barriers

"....NOW THEREFORE BE IT RESOLVED that OFA consult with Commodity Boards with the intent of developing a lobby of both the Provincial and Federal governments to allow beginning farmers to use an "industry average ANS" for the size and type of their operation for their start-up years, and also lobby for an appeal process be developed for beginning farmers." (Ontario Federation of Agriculture Resolution, July 2008)

... at the expense of
beginning farmers

"....timing of payments seems to have been treated as the dominant consideration; this occurred at the expense of some basic and reasonable policy design principles." (Impact of Government Programming on Beginning and Diversifying Farmers: The Case of the Ontario Cattle, Hog and Horticulture Program, George Morris Centre, September 2012)

IS THERE ACCOUNTABILITY FOR MISTAKES?