AgriStability: Step 4. After you apply
Step 4. After you apply
1. AAFC will calculate your benefit
AAFC will base your AgriStability payment on your farm's current and prior year production margins. To receive a payment, your production margin for the current year must fall below your reference margin by more than 30%.
AAFC calculates a production margin by subtracting your allowable expenses from your allowable income that you reported to the Canada Revenue Agency.
If you report on the cash basis, changes to your purchased inputs, deferred income, accounts receivable and payable, crop inventory and livestock inventory are also included. These changes are calculated by comparing the value at the beginning of your fiscal year to the end of your fiscal year. This ensures AAFC has the most complete picture of your farm's income situation for the year.
For more information on production margins and allowable income and expense items, visit How are production margins calculated?
Your reference margin is based on your production margins for the previous five years. The highest and lowest years are dropped and average the remaining three years. This is called an olympic average.
If you do not have five years of history, we will base your reference margin on the previous three years.
If you are a new farmer and do not have three years of history, AAFC will create production margins for the missing years using industry averages.
Reference margin limit
Your reference margin cannot exceed the average allowable expenses for the three years used to calculate your reference margin. If it does, AAFC applies the lower amount. This is called the reference margin limit.
The reference margin limit cannot reduce your reference margin by more than 30%. This ensures you have support for at least 70% of your reference margin.
For more information on reference margins and the reference margin limit, visit How are reference margins calculated?
Structural change adjustment
If you experienced a significant change in the type or size of your farming operation, a structural change adjustment may be applied to your reference margin. This will ensure your reference years are more reflective of what your farm looks like today.
For more information on structural change, visit How are structural change adjustments calculated?
AAFC may combine your farm with another farm even if each farm reports separately for income tax purposes if the farms are not:
- legally independent
- financially independent
- operationally independent
AAFC may combine farms and treat them as a whole farm when:
- all or some of the transactions between the farms are not at fair market value
- the farms do not maintain separate books
- the farms share the same land or equipment
If AAFC combines your farm with another farm, your payment will be based on your share of the whole farm’s production margin in the program year and reference margin. For more information on combining farms, visit What is whole farm combining?
2. AAFC will send you a Calculation of Program Benefits
Once your form is processed, AAFC will send you a Calculation of Program Benefits showing how your benefit was calculated along with your payment if applicable.
You may receive a payment when your production margin for the program year falls below your historical reference margin by more than 30%. For more information on payment calculations, visit How is my payment calculated?
The maximum payment you can receive (including combined operations) is $3 million.
If you received an interim payment or a targeted advance payment, it will be deducted from your final program year payment.
AgriStability payments are not issued for less than $250.
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