Federal and Provincial Governments Launch AgriInvest – $600 Million on the Way to Farmers
Federal, provincial and territorial governments have signed agreements to launch a new suite of business risk management programs for 2008. The new programs are moving forward under Growing Forward, the new policy framework for Canada’s agriculture, agri-food and agri-based products industry and include:
AgriInvest farmer accounts;
AgriStability, an improved margin based program;
AgriInsurance, which includes crop insurance and production insurance and is being expanded to include more commodities;
AgriRecovery, a new disaster relief framework.
With agreements now in place to implement the new suite, $600 million in federal funds to kickstart new AgriInvest accounts is on the way to farmers.
“We have worked hard with provinces and industry to develop AgriInvest and I am pleased this program is now up and running with $600 million to kickstart new farmer accounts,” said Minister Ritz. “This seals the deal on our commitment to replace CAIS with better programs”.
With this announcement, the federal government is following through on a $1 billion commitment to improve farm financial programs. Close to $400 million has already been delivered to farmers through a direct payment to address high production costs.
With AgriInvest accounts, farmers make a deposit based on a percentage of allowable net sales of eligible commodities and receive a matching government contribution. Farmers have the choice to withdraw the money to cover small margin declines or for investments to mitigate risks or improve market income.
AgriInvest is in place for 2008 and $600 million in federal funds to kickstart AgriInvest accounts is now being delivered.
Initial kickstart deposits will be made to farmer accounts based on 2.63 per cent of a farmer’s average Allowable Net Sales (ANS) from previous years. A final federal kickstart deposit may be made based on availability of funds.
Farmers will not have to make a matching deposit to receive the money.
The bulk of direct payments of $400 million to help address high production costs over the last four years have been delivered, and final payments are going to farmers now. To date, farmers have received $322 million.
The Canadian Agricultural Income Stabilization (CAIS) program has been replaced with a new suite of business risk management programs which has been developed based on input from farmers.
Most farmers will automatically receive a letter with information on their share of the $600 million. For others, applications are available on the program web site or by calling 1 866-367-8506.
AgriInvest Kickstart – What Farmers Need to Know
How will the AgriInvest Kickstart funds be delivered?
Farmers will receive a letter which tells them the amount of their kickstart benefit. In all provinces except Quebec, the $600 million is being delivered by the federal government.
Who is eligible?
To be eligible, farmers must have farmed in 2007 and must commit to participating in AgriInvest for the 2007 program year. Farmers do not have to make a deposit to be eligible for the kickstart funds.
Do I need to apply?
Eligible farmers who received a cheque under the $400 million cost of production payment this summer will automatically receive a letter and do not need to apply. For those who need to apply, forms are available on the program web site at www.agr.gc.ca/agriinvest or by calling 1-866-367-8506.
In Quebec, the program is delivered provincially. Farmers can contact La Financière agricole du Québec at 1-800-749-3646 for more information.
How will my benefit be calculated?
Deposits will be made to accounts based on 2.63 per cent of a farmer’s average Allowable Net Sales (ANS) from previous years. An additional federal deposit may be made at a later date based on availability of funds.
ANS are sales of Eligible Commodities minus Purchases of Eligible Commodities in a year. Eligible commodities include most primary agricultural commodities except those covered under supply management (dairy, poultry, and eggs). Farmers who produce a mix of supply managed and other commodities are eligible to participate. The government contribution in these cases will be adjusted to reflect their share of the sales of non-supply managed commodities.
For most farmers, the share of kickstart funds will be based on average ANS from 2000 to 2004 inclusive. For those not farming in 2004 but farming in 2005 and 2006, the payment will be based on average ANS for the years they farmed. For those new to farming in 2007, the payment will be based on their ANS for 2007.
There is a cap on average ANS of $3 million, which means that a farmer’s kickstart payment is capped at $78,900, based on the 2.63 per cent payment rate.
Can I withdraw the money?
Farmers will not have to make a matching deposit to receive the money. They have the option to either withdraw the funds or keep the funds on account. Until the AgriInvest program is fully implemented, there will be a limit on the number of withdrawals.
How can I find more information?
Check the AgriInvest web site at www.agr.gc.ca/agriinvest or call toll free 1-866-367-8506.