Industry Advisory - August 2020

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

The deadline to submit 2019 AgriStability program forms without penalty is September 30, 2020.

 

Updated: August 14, 2020

In this issue: 

Why Submit?

Submitting program forms is part of the annual process for producers enrolled in AgriStability. The information provided determines whether each producer qualifies for a payment. It also ensures the farm’s reference margin, which payments are based upon, is up to date.

Completing your AgriStability program forms each year helps build a financial profile. This financial profile provides you with more accurate coverage in the future. If a producer does not file annually, there are gaps in the information needed to build the reference margin. This will cause delays when processing future program forms.   

 

How to Submit?

Individual producers (sole proprietors) must submit their income and expense (tax) information, provided on the T1163 form, to the Canada Revenue Agency (CRA). CRA then shares this information with SCIC. An individual producer’s supplemental information (inventories, receivables/deferrals, payables, and purchased inputs) are submitted directly to SCIC. Corporations and co-operatives submit all AgriStability program forms directly to SCIC.

Program forms can be submitted by fax, mail or email, or dropped off in person at any SCIC customer service office. You can also choose to use our web-based application, AgConnect, to easily enter your program information online and streamline your form submission.

 

Using AgConnect

You can easily enter your program information online through our web-based application AgConnect. Information submitted through AgConnect enters SCIC’s system directly, allowing files to be processed quicker.

Using AgConnect will help you to:

  • access your AgriStability information in one place – the platform is available online 24/7
  • eliminate paperwork and the need to track multiple files
  • easily file your forms online
  • view important historical information about your account
  • send supporting documents electronically

To begin using AgConnect, contact the SCIC AgriStability Call Centre at 1-866-270-8450. Our AgriStability Program experts can help get you set up on the application. Click here to learn more about AgConnect.

 

What if the September 30 Deadline is Missed?

Any 2019 program forms received after September 30, 2020, may be subject to a penalty fee. AgriStability benefits will be reduced by $500 per month; however, if no benefit is calculated, there is no penalty applied. Program forms, with penalty, must be submitted by December 31, 2020.

 

Partnerships: All Parties Must Submit Their Information

SCIC cannot process a file until all partners in the operation have submitted their program forms. Each individual or entity in a partnership must submit separate program forms reporting 100 per cent of the partnership’s income, expenses, accounts payable, accounts receivable, inventory, deferrals and purchased inputs. Each partner must also identify their percentage share of the partnership. SCIC calculates each partner’s share of any benefit based on the percentage share of the operation.

 

Filing your Farming Income (or Loss)

To be eligible for AgriStability program benefits, you must submit your 2019 farming income (or loss) information to the Canada Revenue Agency (CRA). This information is collected on the income tax return submitted to the CRA.

 

Requesting Your AgriStability Preparation Report

If you were in Crop Insurance last season, you can easily access last year’s acreage and crop production information for your farm. Simply contact the AgriStability Call Centre at 1-866-270-8450 and ask for an AgriStability Preparation Report. This report can assist you with completing your 2019 AgriStability program forms.

 

Interim Benefits

Prior to completing your fiscal year, you may be eligible to receive a portion of your AgriStability benefit payment early. An 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 agreed to increase the 2020 interim benefit payment percentage from 50 per cent to 75 per cent for Saskatchewan producers due to the impacts of COVID-19. 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.

 

New to AgriStability?

If you are new to AgriStability or are returning after being out of the Program for four or more years, you can take advantage of the simplified participation process to create your reference margin. New participants have the option of using three years of historical information (2019, 2018, and 2017), rather than the traditional five years, to build their farm’s reference margin. The information required includes income, expenses, inventories, accounts payable, receivables/deferrals and purchased inputs. This information is required before program year benefits can be calculated.

Packages requesting the required historical information have been delivered to those who are new to the Program. If you have questions while completing your historical information, please contact the AgriStability Call Centre at 1-866-270-8450 or visit your local SCIC office.

 

Reporting Crop Share

When reporting crop share arrangements, the tenant should be reporting their percentage share of the income and expenses based on the crop share arrangement. This ensures the appropriate amount of the crop share arrangement is allocated as allowable income and expenses for AgriStability.

For example: If the crop share arrangement is 60 per cent production for the tenant and 40 per cent production for the landlord, then the tenant would report 60 per cent of the income and 60 per cent of the expenses.

 

Additional Codes for the 2019 AgriStability Program

In response to recent trade agreements, the Canada–European Union Comprehensive Economic and Trade Agreement (CETA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) were implemented with programs to support the Canadian Dairy Industry. The Dairy Farm Investment Program (DFIP) was brought into effect to help Canadian milk producers improve productivity through upgrades to their equipment. The Dairy Direct Payment Program (DDPP) supports dairy producers as a result of market access commitments made under the new trade agreements.

For AgriStability, the benefits received from these dairy programs will be treated differently as the funding is for different purposes. Listed below are the codes to use when reporting income received from these programs and how the income will be treated.

Program Payment Code
Dairy Farm Investment Program (DFIP) 682
Dairy Direct Payment Program (DDPP) 683

Code 682: This new code will be non-allowable for AgriStability in the Program Year Margin and the Reference Margin. 

Code 683: This new code will be allowable for AgriStability in the Program Year Margin only. It will be non-allowable in the years used to calculate the Reference Margin. 

 

New for the 2020 AgriStability Program

Starting in the 2020 program year, private insurance payments will be treated as non-allowable income in the calculation of the Program Year Margin. This means payments you receive from private insurance programs will no longer reduce the potential benefit you could be eligible to receive from the AgriStability Program.

This change applies to private insurance payments from programs where the premiums are fully producer-funded and compensate for losses related to price, revenue, productions or margins. This includes, but is not limited to, programs like Global Ag Risk Solutions, Just Solutions or the Western Livestock Price Insurance Program. Payments from these programs will remain allowable in the reference years to ensure your support level does not decrease.

 

New Codes for the 2020 AgriStability Program

*NOTE: These new codes are for the 2020 program year only. This does not apply to 2019 forms due September 30, 2020.

To report any private insurance program payments on your 2020 AgriStability program forms, use the line codes listed below. Do not include any Crop Insurance payments you receive. Crop Insurance payments will continue to be treated as allowable income.

Program Payment Code
AgriInsurance (production/crop insurance)-Edible horticulture crops 402
AgriInsurance (production/crop insurance)-Grains, oilseeds, and special crops 401
AgriInsurance (production/crop insurance)-Non-edible horticulture crops 470
AgriInsurance (production/crop insurance)-Other commodities, including livestock 463
Private hail insurance 407
Private insurance proceeds for the replacement of allowable commodities 681
Private insurance proceeds for the replacement of allowable expense items 406
Private insurance proceeds for allowable commodities (production/price/margin insurance) 661
Western livestock price insurance program (WLPIP) 667

Code 407: This new code will cover the hail insurance moved from the AgriInsurance codes. It has the same treatment as code 661. For AgriStability, it will be non-allowable in the program year, but allowable in the reference years. It will remain allowable for AgriInvest.

Code 661: Covers all indemnity payments outlined under 4.3.2 of the AgriStability guidelines. Amounts are non-allowable for AgriStability in the program year, but allowable in the reference years. Amounts also remain allowable for AgriInvest.

Code 681: This new code will cover income from insurance for eligible agricultural commodities and be allowable for both AgriStability and AgriInvest. An example would be payments received for grain destroyed in a bin fire.

Code 406: Covers off the allowable expense items which would be allowable for AgriStability, but non-allowable for AgriInvest.

Code 667: This code has changed. WLPIP income will be non-allowable for AgriStability in the program year, but allowable in the reference years. It will remain allowable for AgriInvest.
 

 

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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.

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