Financial Assistance

AgriStability


PROGRAM DESCRIPTION

AgriStability is designed to help farmers manage income risk by providing assistance when their farm experiences a large margin decline. The federal government pays 60% of the cost of the program, and the provincial government pays 40%.


WHO QUALIFIES

All farmers are eligible, provided they conduct at least six months of farming activity and complete a production cycle within their fiscal year. They must report farming income for income tax purposes (or submit the equivalent information if exempt from income tax), and they need to meet all program requirements.

All agricultural commodities are eligible except for certain enterprises (ex: aquaculture, forestry production, processing or resale of items not produced by the participant).


MARGINS

Support under AgriStability is based on margins, i.e. operating income less operating expenses as defined by the program.

  • Income and expenses directly related to the production of farm commodities are included in the calculation, ex: commodity sales or purchases, fuel, inputs, and AgriInsurance proceeds and premiums. Margins are adjusted for changes in inventory, accounts payable and receivable, and purchased inputs.
  • Other income such as custom work, rental income, or program payments are not included, nor are expenses such as overhead, repairs, rent, interest, or depreciation.

By using margins, the program responds to changes in input costs and commodity prices, but treats all producers similarly regardless of their equipment holdings, business structure, or debt load. Commodity sales, fuel, fertilizer, pesticides and feed - all of which tend to be highly variable - are included in the margin calculation.

Support is based on the reference margin, or historical average margin based on a producer's actual results, except for beginning farmers, whose reference margin is calculated using industry averages. Farms that expand or downsize have their reference margins adjusted accordingly.

  • The reference margin is calculated by using the average of the margins over the past five years, excluding the years with the highest and lowest margins. If the participant hasn't farmed for five years yet, the average of the past three years is used instead.
  • Starting with the 2013 program year (fiscal year ending after December 31, 2012), the reference margin is limited to the average allowable expenses in the three years used in the reference margin calculation.

The program year margin is the margin in the current year, which is then compared to the reference margin to determine whether a margin decline has occurred.


PAYMENT CALCULATION

A payment is triggered based as follows:

For the 2012 Program Year (fiscal year ending between January 1 and December 31, 2012):

Tier Margin Decline Payment Rate
1 0 - 15% n/a
2 15 - 30% 70%
3 30 - 100% 80%
4 >100% 60%


Starting with the 2013 Program Year (fiscal year ending after December 31, 2013):

Tier Margin Decline Payment Rate
1 0 - 30% n/a
2 >30% 70%


If the program year margin is negative, the producer receives a payment for the negative portion of the margin decline provided it could not have been covered by AgriInsurance.


PAYMENT LIMITATIONS

Payments are limited to $3 million per participant.

The income and expense information of two or more related participants may be combined if their operations are part of a whole farm, even though they report separately for income tax purposes.


APPLICATION PROCESS

At the beginning of the year, each producer receives an Enrolment Notice from the administration, which must be returned along with estimated reference margin.

  • New participants need to submit the information needed to estimate the reference margin and generate the Enrolment Notice. Producers who were not in the program in the previous year must contact the administration to get an application package.
  • Existing participants are automatically enrolled (and obligated to pay the fee) unless they indicate by the deadline that they do not want to participate.

At the end of the year, the producer submits information to calculate the current year's margin and the actual reference margin. The administration notifies the producer of the margin change and any triggered payment.

Please refer to the federal government website (below) for information on deadlines for submitting the Enrolment Notice and margin information.


ADVANCE PAYMENTS

To assist with cash flow during periods of income decline, advances against final payment calculations are offered from time to time. For details, refer to the federal government website (see below).


FOR MORE INFORMATION

The above information is intended as a guide only.

For updates, contact the AgriStability program administration at 1-866-367-8506.

Detailed information and instructions, including forms and guidelines, are available on the Canadian government website: www.agr.gc.ca/agristability


WHO TO CONTACT

MAFRI GO Office for general information.

Program administration at 1-866-367-8506 for AgriStability application information.