Ottawa—The federal-provincial Business Risk Management programs need to stress ways to reduce or prevent financial losses, says Larry Martin, long time agrifood academic and Partner in Agri-Food Management Excellence Inc.A key one would be management training that focuses on reducing risk to increase profitability, he told the Commons agriculture committee. Most provinces have dropped assistance for management training or planning on the basis it doesn't improve profitability or reduce risk.That view “is total nonsense in any industry, but especially for an industry like agriculture that has no management requirements for coming in, and so anything that's going to improve management should be good,” he said.“In addition, there's a large and growing evidence to the contrary that, in fact, management ability increases profitability and reduces risk and, therefore, the liability of government programs.”A Farm Management Canada study identified seven management factors that positively correlated with profitability, he said. Other work has found management training led to “organizations were better structured to manage; and they had personal benefits such as improved confidence, improved leadership ability, improved mental health and stress management.”A recent joint study with BDO of farms in Manitoba found management capacity was a key determinate in profitability. An examination of nearly 1,000 Ontario dairy farms found that management competence accounted for most of their profitability.The current BRM programs “emphasize compensating people for losses, but underemphasizes preventing them,” Martin said. They need to focus on “prevention more and on moving the sector forward.”The BRM programs except AgriInvest “are all about compensation for loss after the fact.” The focus should be on steps such as diversification to prevent losses. “Diversification is generally a major aspect of risk management and, ironically, given the way AgriStability is structured, it's much more likely to pay someone who is not diversified than one who is, because of the fact that one commodity can can offset the other.” Martin said this is likely a major reason many farmers don't participate in AgriStability.Meanwhile AgriInvest is treated by many farmers as a pension plan. It should be enhanced by increasing the limit farmers can put in it or the government contribution. The funds in it could be invested in projects that value chain roundtables identify as helpful to the commodity. Australia, Holland and Denmark have industry roundtables that decide on what they “need to do to become more competitive internationally, and therefore these are the things that we need to invest in.”He said contributions to AgriInvest should be doubled so “it becomes a fund that's actually big enough that people can do something with it. If you tie that model together with more money to invest and say that if they're going to invest, they can still use it for income insurance—I don't have a problem with that—but tie it also to investments in the kinds of things the industry thinks it needs to go forward. I think that's a very progressive approach.”Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.