The AgriStability program helps farmers manage income risk by providing assistance when their operating margins decline. By basing support on margins (operating income less operating expenses), it responds to changes in production, input costs, and commodity prices.
Support is based on the reference margin (the average margin over the last five years, excluding the best and worst years) using a producer’s actual results. If the margin for the year declines to less than 70 per cent of the reference margin, a payment of 70 per cent of the difference between the reference margin and the margin for the year is triggered.
The AgriInsurance program helps farmers manage income risk by providing assistance when production declines. By basing support on production (yield), it responds to losses in production of a particular commodity. It does not respond to changes in commodity prices or input costs.
Support is based on historical average production, generally with a quality guarantee and at a standard market price. If production for the year is less than the guaranteed amount, a payment is triggered.
In AgriStability, AgriInsurance premiums are allowable expenses and AgriInsurance payments are allowable income, in both the current and reference years.
If a producer’s margin is negative, the negative portion of the margin decline is eligible for an AgriStability payment only if it could not have been covered by AgriInsurance at the 70 per cent coverage level (70 per cent of expected yield).