Payments, new programs swamp AgriCorp: report

Ill-equipped as AgriCorp may be for all the ag support programs and payments it’s been asked to handle in recent years, the Ontario agency should continue to do the job, according to the province’s auditor general.

Auditor General Jim McCarter’s special report on AgriCorp, requested by provincial Agriculture Minister Leona Dombrowsky and released Tuesday, finds the provincial farm support delivery agency “has had difficulty adapting to rapid changes caused by a substantial growth in the number of farm support programs and a doubling of annual support payments to farmers in the last few years.”

That, in turn, has “increasingly challenged” AgriCorp’s ability to deliver these programs efficiently, effectively or transparently, McCarter wrote. The report’s focus was mostly on the agency’s delivery of the Canadian Ag Income Stabilization (CAIS) program.

Dombrowsky, in a statement Tuesday, said she plans to consult with farmers on the report’s findings and get their input by mid-September.

She asked McCarter’s office for the value-for-money audit, she said, due to farmers’ “concerns with regard to the timeliness and accuracy of AgriCorp’s program delivery.”

Specifically, she said in a separate letter to McCarter, “there were a number of concerns from the agriculture community over delays in processing applications and payments, poor communications, a lack of customer focus and the lack of timely, bankable and transparent delivery of critical farm support programs.”

All that said, McCarter prefaced his summary by saying AgriCorp has “two main benefits” in delivering CAIS, as opposed to having the federal government do so.

For one, the province spends “substantially less” on administration than the national average and could save more by adopting other jurisdictions’ practices. Secondly, a provincially-run program can better focus on meeting local farmers’ “unique service-level needs.”

Also, McCarter noted, when the province delivers CAIS, data that the province needs for its own programs is “available immediately,” but “may take longer” when the federal government delivers the program.

Saskatchewan and British Columbia are reportedly reconsidering whether the federal government should continue delivering CAIS on their behalf, partly for that reason, he wrote.

“Negative impact”

Among McCarter’s observations of AgriCorp’s work, he found that:

• compared to five years earlier, AgriCorp in 2008 was delivering 13 farm support programs, up from two, and handled an amount of total payments to farmers that had “more than doubled,” and both those problems had a “negative impact on application turnaround time;”
• most farmers surveyed were unable to make a “reasonable and reliable” estimate of their CAIS program benefits, could not rely on them when seeking farm financing, and weren’t given enough information in their benefit statements to double-check whether AgriCorp’s calculations were correct;
• AgriCorp’s online application system doesn’t allow farmers enough opportunities to edit the information they input, and providing more chances for edit checks would improve efficient handling for those 20 per cent of applications submitted online (and persuading more farmers to apply online would also improve efficiency);
• AgriCorp didn’t have a formal collection policy in place to handle a total of $24 million in farm support program overpayments (as of March 31 this year), and thus didn’t treat its debtors consistently in how it collected or clawed back payments to collect overpaid funds;
• half the calls to the AgriCorp call centre are to report yields, which can overwhelm its 35-member staff during certain months, whereas farmers in other jurisdictions collect that information online or by fax, and AgriCorp also has no dedicated field staff to help farmers with CAIS, unlike other jurisdictions;
• AgriCorp’s detailed audits of producer records resulted in adjustments in 50 per cent of the files audited, which suggests AgriCorp should expand audit coverage from its current level of less than one per cent of all files;
• AgriCorp uses the CAIS computer system to administer almost all farm support programs, for which the system was not designed, on top of which the system needs a lot of manual processing, doesn’t link farmer information to other support programs, has a programming structure that can lead to payment errors, and has “limited” web technology; and
• there are no performance measures in place to show whether AgriCorp’s support programs help reduce risk or stabilize income.

“Somewhat surprisingly,” McCarter wrote, “even though farm support payments have more than doubled in recent years, only half of the farmers who responded to our survey thought that AgriCorp support programs helped to stabilize their income.”

In its most recent full fiscal year, AgriCorp paid out $468 million to Ontario farmers though federal/provincial and “Ontario-only” farm programs.

On top of CAIS ($165.7 million), those include production insurance ($111.6 million), the Market Revenue program, the CAIS inventory transition initiative (CITI), the Ontario inventory transition program (OITP), the Canada-Ontario general top-up program (GTUP), the self-directed risk management program (SDRM), the plum pox program for fruit growers, the Ontario Grain and Oilseed Program, the Ontario edible horticulture crop payment, the Risk Management Program (RMP), the Ontario cost recognition top-up program, the Ontario juice grape transition program and the Ontario cattle, hog and horticulture payment program ($140 million).