Industry Advisory - April 2020

AgriStability Industry Advisories are posted periodically to provide information about Program deadlines, features and changes.

Updated: April 24, 2020

In this issue: 

AgriStability Enrolment Deadline

The deadline to enrol in AgriStability for the 2020 program year has been extended without penalty to July 3, 2020.

This step, agreed to by federal, provincial and territorial governments will help producers manage the impact of current market disruptions, increased expenses and production challenges facing many farm operations. Click here to read the full news release.

 

Whole-Farm Protection with AgriStability

In Saskatchewan agriculture, there are no guarantees. While you cannot control the weather, market fluctuations or rising input costs, you can manage your risk with AgriStability. This low-cost program considers the financial impacts of unforeseen circumstances on your entire farm operation, including all of your commodities.

For example, some common situations impacting the financial stability of your farm may include:

  • Undesirable weather conditions,
  • Increased expenses (e.g., grain drying costs or additional costs with harvesting in the spring),
  • Poor quality crops (e.g., losses due to lower grade crops, reduced inventory value, or spoilage of stored grain),
  • Drop in market prices, or
  • Trade limitations.

While these unknown factors may not trigger a payment on their own, AgriStability looks at them as a whole, with benefits based on the combined effects to the farm. Plus, coverage is personalized based on your farming history.

 

New for the 2020 AgriStability Program

The AgriStability Program continues to evolve in order to meet the needs of Canada’s producers. In December 2019, federal, provincial and territorial agriculture ministers announced a change for how AgriStability treats revenue from private insurance programs. Effective for the 2020 program year, revenue from private insurance payments will be excluded from the AgriStability program year calculation. Programs such as hail insurance, Global Ag Risk Solutions, Just Solutions or the Western Livestock Price Insurance Program will now be excluded when calculating a producer’s allowable income. This change allows producers to access additional coverage, while increasing the potential to receive an AgriStability benefit.

Also, the soon-to-be-finalized 2018 program year was the first year impacted by the Canadian Agricultural Partnership agreement, resulting in additional benefits for producers. The AgriStability calculation changed to ensure the value used to determine a producer’s coverage could not be below 70 per cent of their historical reference margin. This new method is resulting in more than $10 million additional dollars being paid to Saskatchewan AgriStability participants.

 

AgriStability Helps Saskatchewan Producers

In the last four program years (2014-2017), Saskatchewan producers received AgriStability benefits of over $285 million dollars. These benefits were a result of uncontrollable factors that negatively impacted producers’ farms, such as price drops in the cattle market, dry conditions reducing yields and a difficult harvest with crop left out over winter. To date, the 2018 program year paid over $110 million in AgriStability benefits to Saskatchewan producers for losses related to crop market declines and reduced production due to dry conditions.

 

How Does AgriStability Work?

AgriStability is designed to help farm operations facing large margin declines caused by production loss, increased costs or market conditions. This margin-based program provides personalized coverage for each farm by using historical information, based on income tax and supplementary information.

AgriStability calculates a program year margin and a reference margin for each farming operation. The current year’s financial profile (based on incomes and expenses) for your farm is called the program year margin. The program year margin is compared to the reference margin from the previous five years. The reference margin is determined by excluding the highest and lowest margins in the previous five years and averaging the remaining three.

If your program year margin falls more than 30 per cent below the reference margin, due to any combination of production loss, adverse market conditions or increased costs, AgriStability could provide a payment. The payment provides 70 cents for every dollar of decline below the trigger point.

 

Who Can Participate in AgriStability?

To be eligible to participate in the AgriStability Program, you must derive income from the primary production of agricultural commodities. In the program year, you must also have:

Carried on the business of farming in Canada and reported farming income (or loss) for income tax purposes;

  • Completed a minimum of six consecutive months of farming activity; 
  • Completed a production cycle; and
  • Submitted the required information by the deadlines.

 

How Much Does it Cost to Participate in AgriStability?

AgriStability is a low-cost Business Risk Management program. The program fee is $3.15 for every $1,000 of Contribution Reference Margin. A $55 fee is also applied to help cover administrative costs. All participants are given 30 days from the date on their Enrolment/Fee Notice or until  July 3, 2020, whichever is later, to pay these fees without penalty.

 

How to Enrol in the AgriStability Program

Enrolling in AgriStability is easy. Click here to request a call-back. You can also contact your local SCIC customer service office or call the AgriStability Call Centre (1-866-270-8450) and request a new participant package.

Producers interested in AgriStability will be asked a few simple questions over the phone, with no initial requirement to supply historical farm information. Once enrolled, new participants have the option of submitting either their previous three years or five years of historical information for processing their final application.

Producers wishing to participate for the 2020 program year must request to enrol by July 3, 2020. The Enrolment/Fee Notice may be issued after July 3, as long as the request to enrol occurred by this date.

 

What is the Enrolment/Fee Notice?

Once enrolled in the AgriStability Program, SCIC will mail you an Enrolment/Fee Notice. This notice provides a breakdown of the program fees and details of participating in the AgriStability Program.

For 2020, all participants have 30 days from the date on their Enrolment/Fee Notice or until July 3, 2020, whichever is later, to pay these fees. If the annual program fee is paid after the initial deadline, a 20 per cent penalty fee will be added. This additional cost is explained on the Enrolment/Fee Notice and can be paid anytime until the final deadline of December 31, 2020.

 

Changing Business Structure

July 3, 2020, is also an important date for AgriStability participants who have experienced changes within the business structure of their farm during the 2019 fiscal year. Participants must contact SCIC by July 3, 2020, if they have:

  • Changed their farm from a sole proprietorship to a corporation,
  • Changed their farm from a corporation to a sole proprietorship, or
  • Transitioned their farm to a partnership.

Program fees and benefit calculations can change when farm business structures change. To avoid processing delays, please ensure SCIC has the most current information if your business structure has changed. Please complete both forms when changing from a sole proprietorship to a corporation, or vice versa:

 

Keeping Information Current

AgriStability participants are reminded to provide SCIC with updated contact information. If your farm’s phone number, email address or mailing address has changed please contact the AgriStability Call Centre with the correct information.

By ensuring your contact information is current, SCIC will be able to connect with you regarding the AgriStability Program, when needed, which will reduce the chance of delays in benefit processing or missing a deadline because we were unable to reach you. Ensuring we have the correct information for your contact person (e.g., accountant or form preparer) is also important. If this has changed, please complete the Change Contact Person form and submit it to SCIC.

 

Withdrawing from AgriStability

The Enrolment/Fee Notice also provides producers with the opportunity to withdraw participation in the AgriStability Program. You must indicate your intention to withdraw by July 3, 2020. After this deadline, participants are automatically enrolled for 2020 and required to pay program fees.

If you cancel participation and would like to rejoin, please contact the AgriStability Call Centre before the enrolment deadline of the year you wish to participate in. Producers who withdraw from the Program will not be automatically re-enrolled.

 

AgriStability Works with Crop Insurance

SCIC encourages producers to consider participating in both Crop Insurance and AgriStability Programs as part of a comprehensive risk management plan for their farming operation. With Crop Insurance, producers have coverage for their crops from the start of seeding season until harvest is complete. Through AgriStability, producers have even further coverage for other uncontrollable events throughout the year including rising input costs, falling commodity prices or additional expenses (e.g., increased costs for grain drying). Since AgriStability accounts for the whole farm, the Program can provide benefit payments even if producers also receive a Crop Insurance payment.

 

2019 Program Year files are Being Processed

Participants in AgriStability for the 2019 program year do not need to wait until the September 30 deadline to submit their program forms. Once producers have finalized their income and expense (taxes) information for 2019, they can complete their AgriStability supplemental information (inventory, purchased inputs, deferrals, accounts payable and accounts receivable) and submit it to SCIC.

SCIC processes files based on the order they are received. Submitting 2019 program forms well in advance of the deadline will help files be processed more quickly.

 

2020 Interim Benefits

Interim benefits provide an option to receive a portion of AgriStability benefits early, to help support losses and cover costs before completing the fiscal year. The interim benefit is based on the estimated margin decline or loss for the year compared to the farm’s reference margin. The decline must be at least 30 per cent below the reference margin in order to access a payment.

For the 2020 program year, interim benefits will be issued at 75 per cent of the estimated final benefit. The federal and provincial governments have agreed to increase the 2020 AgriStability interim benefit payment percentage from 50 per cent to 75 per cent for Saskatchewan producers. Click here to read the full news release.

Producers receiving an interim benefit payment must be enrolled and submit all final program forms by the required deadlines. Contact the AgriStability Call Centre at 1-866-270-8450 to learn more.

 

AgriStability Support Across the Province

SCIC has 21 customer service offices across Saskatchewan where producers can discuss their risk management plans with a Program Advisor. During this time, knowledgeable staff are available to assist producers by phone or email. Contact Us to connect with a representative. 
 

 

Contact Us

We're Here For You

AgriStability Program experts are available across the province to help producers, accountants or form preparers.

Contact a Program Advisor or the AgriStability Call Centre at 1-866-270-8450 or by email to: agristability@scic.ca.

Click here to access our Customer Service Office listings»