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September 20, 1996
(Forest Resources and Agrifoods)


Government of Canada signs Safety Nets Agreement with Newfoundland

Almost $6 million in safety net funding under the Canada/Newfoundland Agriculture Safety Nets Initiative was announced today by Ralph Goodale, Minister of Agriculture and Agri-Food Canada (AAFC) and Beaton Tulk, provincial Minister of Forest Resources and Agrifoods.

The agreement will see improvements made to existing Crop Insurance and Net Income Stabilization Account (NISA) programs, and the introduction of an Agri-Food Innovation Program for producers of non supply-managed agricultural commodities in Newfoundland and Labrador.

Non-supply managed commodities in the province (which include all agricultural commodities except dairy, chicken and eggs) generated in excess of $16 million in farm cash receipts in 1995. It is anticipated that the safety nets initiative will not only provide long-term stability to these commodities, but will encourage further diversification of the primary industry.

"The main objective of these programs is to stabilize farm incomes, improve long-term viability and secure the competitiveness of agricultural sectors across Canada," said Mr. Goodale.

"This will be accomplished through production insurance programming, the improvement of marketing skills and practices, the pursuit of value-added opportunities, investments in human resource development and the further development of the resource infrastructure," said Mr. Tulk.

The new safety net program was launched to replace commodity-based safety nets with more market-driven programs which do not influence farmers' production decisions and also respect international trade obligations.

The programs assist the industry by helping to offset the largely uncontrollable risks of adverse weather conditions and large fluctuations in market prices and also by helping to maintain an adequate national food supply, stable and affordable consumer prices and protection and maintenance of the resource base.

Alberta, Ontario, Prince Edward Island, New Brunswick and now Newfoundland have signed agreements with the federal government. Nova Scotia, Manitoba and British Columbia are in the process of ratifying agreements. Talks are continuing on agreements with Quebec and Saskatchewan.

The Canada Agricultural Safety Nets Initiative is cost-shared 60/40 between the Government of Canada and the participating province.

Overall, the federal government will invest in excess of $600 million for each year of the three-year safety nets program, of which roughly $400 million is allocated annually to NISA and crop insurance programs. Of the balance of federal funding, about $40 million will be used for federal market-related programs such as cash advances and $160 million will be earmarked for province-specific companion programs.

Provinces will contribute an additional $400 million, of which $300 million will be used for NISA and crop insurance and $100 million for companion programming.

The federal government's commitment to maintain funding for farm safety nets at $600 million per year was set in the 1995 Budget and confirmed again in the 1996 Budget.

Contact: Bill Schissel, Agriculture and Agri-Food Canada, Ottawa, (613) 759-7231; or Donna Kelland, Department of Forest Resources and Agrifoods, St. John's, (709) 729-5090.

1996 09 20   2:55 p.m.

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