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Fact Sheet: Growing Forward 2: AgriStability and AgriInvest

Federal, provincial and territorial governments have agreed to a new 5-year Growing Forward 2 (GF2) policy framework, which comes into effect April 1, 2013. Under GF2, governments are investing $3 billion over five years in strategic initiatives to stimulate innovation, competitiveness and market development.

Producers will also continue to have access to a comprehensive suite of Business Risk Management (BRM) programs that provide coverage in cases of extreme volatility and disaster situations. BRM programs are in place to protect against income declines and production losses caused by drought, flooding, low prices, or increased input costs. These programs work together by providing protection for different types of losses, as well as cash flow options.

AgriStability in the 2013 Program Year

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(allowable revenue less allowable expenses) in the program year drops below their average margin from previous years (historical reference margin).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 in the 2013 program year, governments will provide assistance once a producer's margin falls below 70 per cent of their historical reference margin. In other words, producers will receive an AgriStability payment when their income in the program year drops more than 30 per cent below their historical reference margin. The AgriStability fee will be reduced to reflect the 70% coverage level.

Harmonized Positive and Negative Margin Coverage Levels

Starting in the 2013 program year, a producer's payment will be based on a single level of government support (70%) for both positive and negative margin declines. That is, for every dollar of decline beyond 30%, producers will be eligible to receive $0.70 in government assistance.

Limited Reference Margins

Starting in the 2013 program year, producers' reference margins will be limited to the lower of their historical reference margin or the average of their allowable expenses reported in previous years.

Sample Calculation:

A Reference Margin $150,000
B Allowable Expenses $100,000
C Reference Margin for Benefit Calculation (lower of A or B) $100,000
D Payment Trigger Level (C x 70%) $70,000
E Program Year Margin $0
F Decline (D-E) $70,000
AgriStability Payment (F x 70%) $49,000

AgriInvest in the 2013 Program Year

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 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, producers will be able to contribute up to 100% of their ANS to their account annually and up to 400% of ANS in total so that producers can better use AgriInvest as a risk management tool.

For more information, visit the AgriStability web site, the AgriInvest web site or contact Agriculture and Agri-Food Canada toll-free at 1-866-367-8506.

British Columbia, Alberta Government, Government of Saskatchewan, Manitoba, Ontario, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, Yukon Government, Canada

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Fact Sheet: Growing Forward 2: AgriStability and AgriInvest (PDF Version, 113 KB)

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