The Canadian government has announced a replacement to Growing Forward II, which expired effective December 31, 2017.
The new Farm Business Risk Management Program still includes AgriStability and AgriInvest.
Farm Business Risk Management Programs
The suite of Farm Business Risk Management programs includes:
- AgriStability: support when producers experience a large margin decline.
- AgriInvest: cash flow to help producers manage income declines.
- AgriInsurance: cost-shared insurance against natural hazards to reduce the financial impact of production or asset losses. The Western Livestock Price Insurance program will continue to play an important role in the Business Risk Management Program suite.
- AgriRecovery: disaster relief framework to help producers with the cost of activities necessary for recovery following natural disaster events.
Implementation of the New Business Risk Management Program
Changes to the Farm Business Risk Management programs will come into effect for the 2018 program year.
Note: The existing program rules remain in effect for the 2016 and 2017 program years.
Most of the rules carry-forward from Growing Forward II, however, there are some changes in the new program.
Changes to AgriStability & AgriInvest
The Reference Margin Limit (RML) will be changed as follows:
- The change to the Reference Margin Limit will ensure producers from all sectors will have improved access to support under the program, regardless of their cost-structure.
- It will guarantee all producers at least 70% of their Reference Margin.
- The RML will continue to target assistance to significant income losses threatening the viability of producers' farms and that are beyond their capacity to manage.
- A late participation mechanism has been added that provincial and territorial governments can trigger to allow producers to enter the program late in situations where there is a significant income decline and a gap in participation.
- The mechanism will only be triggered in response to significant events and benefits will be reduced by 20% for producers who enrol late, to encourage regular annual enrollment by producers.
- This measure is intended to allow governments to ensure all producers can access AgriStability support when a significant decrease in revenue threatens the viability of the farm, should provinces and territories choose to trigger it.
Changes to AgriInvest
- Beginning in the 2018 program year, the maximum Allowable Net Sales (ANS) eligible under AgriInvest will be reduced to $1 million, down from $1.5 million.
- The annual government matching contributions will be limited to $10,000 per AgriInvest account, down from $15,000.
- Currently there is approximately $2.2 billion in AgriInvest account balances, which provides producers with flexibility and quick access to funds to help manage their risks.
- Under AgriInvest the minimum payment will be adjusted from $75 to $250.
- A $250 minimum payment will also apply under AgriStability.
Governments (Federal & Provincial) will undertake a review of their Business Risk Management programs to assess program effectiveness and impact on growth and innovation.
There will be an early focus on the ability of the programs to respond to market risk, with a specific focus on AgriStability.