Business Risk Management (BRM) programs are in place to help farmers in managing risks from income declines resulting from drought, flooding, low prices, and increased input costs. The programs work together by providing protection for different types of losses, as well as cash flow options.
AgriInvest helps cover small margin declines.
AgriStability assists in cases of large margin declines caused by circumstances such as low prices and rising input costs.
AgriInsurance offers protection for production losses related to specific crops or commodities caused by hail, drought, flooding, disease and other natural hazards.
AgriRecovery helps producers return their farm businesses to operation following disaster situations.
Advance Payments Program is a complementary federal-only program to help crop and livestock producers with cash flow and provides flexibility for marketing of commodities.
Summary of Program Payments:
Federal/Provincial Contributions and Payments
| Program |
Payments To Date* |
* Reflects payments since 2007 introduction of the suite. 2010 AgriInvest and AgriStability processing is currently being finalized, 2011 processing is just beginning. As of August 30, 2012.
** AgriInvest Kickstart was a one-time federal payment to producers to assist them in building their AgriInvest Accounts
*** Advance Payments Program - This figure represents the interest paid on advances by the federal government. |
| AgriInvest |
$1,300,664,320 |
| AgriInvest Kickstart** |
$563,164,952 |
| AgriStability |
$3,225,250,523 |
| AgriInsurance |
$3,972,779,705 |
| AgriRecovery |
$899,588,439 |
| Advance Payment Program*** |
$123,866,351 |
| BRM Program Totals |
$10,085,314,289 |
What's in Effect for the 2013 Program Year
AgriStability
AgriStability is a margin-based program which allows producers to protect their farm operations against large declines in farm income. A program payment is triggered when a producer's margin (allowable revenue less allowable expenses) in the program year drops below their average margin from previous years (historical reference margin). Governments will continue to provide a share of the lost income.
70% Margin Coverage: Starting with the 2013 program year, governments will provide assistance once a producer's margin falls below 70% of their historical Reference Margin, which is calculated as the average program margin in three of the past five years, with the highest and lowest years dropped. This change will target assistance to farm operations facing the most severe income losses. The annual AgriStability fee to protect a farming operation is lowered to reflect this coverage level, at $315 for every $100,000 of Reference Margin.
Harmonized Assistance Rates: For the 2013 program year, governments will support for both the positive and the negative portion of a margin decline at 70% of the loss. Harmonizing assistance at 70% simplifies the payment calculation and increases assistance in cases of negative margins to those who are eligible.
Reference Margin Limit: For the 2013 program year, payment calculations will be based on the lower of the historical Reference Margin or the average allowable expenses in the years used to calculate the Reference Margin. This limit has been introduced to better target AgriStability assistance to more severe income losses, rather than profit fluctuations. This change will reduce payments to producers who remain profitable when experiencing a margin drop, while ensuring that the program continues to respond to disaster situations.
The reference margin limit calculation will be applied to all operations, but not all operations will see their reference margins reduced as a result.
For more information about the current program, visit the AgriStability web site: agriculture.canada.ca/agristability.
AgriInvest
AgriInvest is a self-managed producer-government savings account that allows producers to set money aside which can then be used to help risk manage small income shortfalls, or to make investments to reduce on-farm risks. Producers will continue to have the flexibility to withdraw funds at any time throughout the year.
Under the new agreement, producers can deposit up to 1.0 per cent (instead of 1.5 per cent as under the previous agreement) of their Allowable Net Sales* (ANS) each year into an AgriInvest account and receive a matching government contribution.
Although the limit on matching government contributions will be $15,000 a year, down from the current $22,500, producers will be able to contribute up to 100% of their ANS annually and up to 400% of ANS in total so that producers can better use AgriInvest as a risk management tool.
AgriInvest accounts are held at a participating financial institution of the producer's choice (in Quebec they are held by La Financière).
For more information about the current program, visit the AgriInvest web site: agriculture.canada.ca/agriinvest .
* ANS are the net sales of commodities allowable under AgriInvest. Allowable commodities include most primary agricultural commodities except those covered under supply management (dairy, poultry and eggs).
Allowable Net Sales (ANS) = Sales of Allowable Commodities less Purchases of Allowable Commodities
AgriInsurance
AgriInsurance offers protection for production losses related to specific crops or commodities caused by hail, drought, flooding, disease and other factors. Premiums for AgriInsurance coverage are cost-shared between the producer, the province and the federal government. Producers receive a payment when their production is below their guaranteed insured level of protection. AgriInsurance is delivered provincially by a Crown Corporation or a branch of the provincial agriculture department in each province.
In 2012, unseeded acreage benefits were expanded in Western provinces to address flooding.
Governments continue to look at ways to improve coverage for forage and livestock production. Beyond AgriInsurance, federal and provincial governments are also examining the feasibility of livestock price insurance coverage.
For more information, visit the AgriInsurance web site: agriculture.canada.ca/agriinsurance.
AgriRecovery
AgriRecovery is a framework that allows federal, provincial and territorial governments to work together on a case-by-case basis to assess natural disasters (e.g., extreme weather, disease, pests, etc.) affecting Canadian farmers and respond with targeted, disaster-specific programming when assistance is needed beyond existing programs (AgriStability, AgriInvest, AgriInsurance, CFIA, etc.). The funding of initiatives implemented under AgriRecovery is cost-shared on a 60/40 basis with the affected province(s).
The aim of AgriRecovery is to provide affected producers with assistance to help them with the cost of taking actions to mitigate the impacts of the disaster and/or resume business operations following a disaster event.
For more information, visit the AgriRecovery web site: agriculture.canada.ca/agrirecovery.
Advance Payments Program
The Advance Payments Program (APP) provides producers with a cash advance on the value of their agricultural products during a specified period. The APP is a financial loan guarantee program that gives producers easier access to credit through cash advances. The federal government guarantees repayment of cash advances issued to farmers by producer organizations.
This means improved cash flow throughout the year and better opportunities for marketing their agricultural products.
For more information, visit the Advance Payments Program web site: agriculture.canada.ca/app.
Facilitation
In an effort to facilitate the development of a range of agricultural risk management tools, the Government of Canada will support industry-led research and development projects for new insurance-based tools and other products. In addition, support will be available for shared Federal-Provincial-Territorial initiatives to implement and administer new risk management tools.
