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New “Growing Forward” Farm Support Programs
In December 2007, the federal and provincial governments launched a new suite of farm business risk management programs under their vision - “Growing Forward” to replace the earlier Agricultural Policy Framework (APF) programs that expired on March 31, 2008. The new programs include AgriInvest; AgriInvest Kickstart; AgriStability; AgriInsurance, an expanded production insurance program, and AgriRecovery, a national disaster framework. AgriInvest is similar to the NISA program that was cancelled in 2003 while AgriInvest Kickstart (now expired) was a $600 million one-time funding initiative to help producers during the transition to the new business risk management programs. AgriStability replaces the coverage previously provided under the Canadian Agricultural Income Stabilization (CAIS) program and combines both income stabilization and disaster protection. The federal and provincial governments are still working out the program delivery details for AgriInsurance and AgriRecovery. AgriInvest Kickstart Program
AgriInvest Kickstart was a one-time federal initiative to help seed new AgriInvest producer accounts with initial payments based on 2.63% of average Allowable Net Sales (ANS) from previous years (2000-04). You did not need to make a matching producer deposit to access AgriInvest Kickstart funds. If you received a cheque under the $400 million Cost of Production benefit (announced March 9, 2007) you should have automatically received an AgriInvest Kickstart eligibility letter and did not need to apply. For other producers, you needed to file an AgriInvest Kickstart Program Application by April 14, 2008. You have the opportunity to make up to two withdrawals from your AgriInvest account for AgriInvest Kickstart. When you received your AgriInvest Kickstart letter, you were given the option to either withdraw the AgriInvest Kickstart funds, or deposit the funds to your AgriInvest account. You must have responded to your AgriInvest Kickstart letter by June 30, 2008 to receive Kickstart funds. AgriInvest Program
FBC recommends that all farm producers consider this program in their overall risk management strategies, because it provides flexible coverage for small income declines and supports investments to help mitigate risks or improve farm income. Similar to NISA, this new program starting for the 2007 tax year is based on individual accounts into which a producer can deposit 1.5% of ANS annually with matching funds added by the federal and provincial governments. There will be an annual deposit cap of $22,500 based on $1.5 million of ANS. Starting with the 2008 program year, there will be a lifetime account deposit cap of 25% of average ANS for the program year and the two previous program years. Based on an ANS limit of $1.5 million, the largest account balance would be $375,000. Once you reach your maximum account balance, you are no longer eligible to receive matching government contributions. As with NISA, each AgriInvest account will be made up of two parts: Fund 1 represents your contributions, and Fund 2 represents the governments’ matching contributions plus account interest. Fund 2 withdrawals will be taxable. As an AgriInvest participant, you will be notified of your maximum deposit amount after you have filed your 2007 tax return. You will be given two opportunities to withdraw from your AgriInvest account for 2007 AgriInvest. The final late filing deadline for 2007 AgriInvest was December 31, 2008. AgriInvest/AgriInvest Kickstart Program Deadlines – 2008 Program Year File 2008 AgriInvest application with penalty – *December 31, 2009 Make 2008 AgriInvest deposit – 90 days from issue of Deposit Notice *If the September 30, 2009 deadline is missed, the application can still be submitted until December 31, 2009 subject to a 5% reduction in ANS for each month (or each part of the month) that the application is submitted late.
Agriculture and Agri-Food Canada has just announced that for the 2007 AgriInvest program, p roducers will not need to make a deposit in order to receive matching government funds. This is a transition measure while the federal government works toward having accounts held in financial institutions as intended. Federal, provincial and territorial governments are all in agreement.In March, producers can expect to receive information by direct mail on the 2007 government contribution to their AgriInvest account, along with information on their options. Producers have the option to either leave the funds on account or make a withdrawal. To withdraw funds, producers can complete and send in the form included with their notice or call toll free at 1-866-367-8506. AgriStability Program
FBC recommends that all farm producers consider this program in their overall risk management strategies, because it provides comprehensive margin-based protection for larger income declines. AgriStability is significantly different AgriStability provides margin loss protection based on your program year production margin. A program payment can be triggered when the current year program year margin drops below 85% of your reference margin. Your reference margin is your average program margin for three of the past five years after the highest and lowest margin years are dropped from the calculation. To participate in the program, there is an annual fee based on 0.45% of your reference margin protected (based on coverage of 85% of your margin). There is a minimum fee of $45. There is an additional annual charge of $55 to cover administrative costs. AgriStability means more work for everyone Your participation in AgriStability means the collection of extensive information every year. This includes detailed opening/closing inventories, including reconciliation of changes; receivables and payables; and livestock and cropland productive capacity and production margins for the current and previous 5 years. FBC Will Help You Make the Most of the NEW SUITE OF BUSINESS RISK MANAGEMENT Programs Please contact FBC at 1-800-265-1002 if you have questions about, or need help with, any of these business risk management programs for agriculture. For AgriStability: FBC also can help you with completion of your AgriStability application and other forms, but you must keep on top of the requirements and deadlines set by the AgriStability Administration in your area. AgriStability – 2008 Program Year – Key Actions and Deadlines
Note: The above AgriStability program deadlines are effective as of April 30, 2009. |
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