May 01, 2007

OTTAWA - The Honourable Chuck Strahl, Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board, announced today that the $400 million in cost of production payments will begin to be paid out to farmers in June 2007.

"Our government is aware that high production costs are cutting into producer income. This $400 million payment will help them deal with the rising costs they have faced over the past few years," said Minister Strahl. "And for the future, we have committed up to $100 million annually that would be paid into producer savings accounts to address increasing production costs."

Most producers will automatically receive a payment and do not have to apply. Initial cheques will begin flowing in June and are expected to be complete by the end of October. The initial payment will be based on 2.36 percent of a producer's net sales for 2000-2004. If funds remain, final payments will be made in December. (See attached backgrounder for more detail.)

The funds are part of a $1 billion commitment in Budget 2007 to improve national farm income programs. A kick-start payment of $600 million will be paid out to farmer savings accounts once agreement is reached with provinces and territories. Negotiations on the new program are now underway.

The new savings account program along with the disaster relief framework, improved production insurance, and an improved margin based program represents the federal government's proposal for the replacement of the Canadian Agricultural Income Stabilization program.

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