This change impacts the 2020 to 2022 AgriStability program years and could increase the overall amount that AgriStability pays out nationally by around $95 million. This will also help to simplify the program and will increase support for farmers that traditionally have lower allowable expenses.
The agriculture sectors most likely to be impacted by these changes include:
- livestock producers that produce their own feed
- organic and commercial crop and forage crop producers
- mixed farmers.
|Reference Margin Limiting – How It Works|
|Average allowable income||1,000,000|
|Average allowable expenses||400,000|
|Adjusted reference margin (70%)||420,000|
|Reference margin limit (average expenses for three years)||400,000|
Under the old method, the applied reference margin was the lower of the adjusted reference margin ($420,000) and the reference margin limit ($400,000). So in the example above, the program year margin would need to fall below $400,000 to trigger a payout.
With the removal of reference margin limiting, the program year margin would need to fall below $420,000 to trigger a payout.
For more information, visit the AFSC website here: https://afsc.ca/news/agristability-sees-significant-change-with-the-removal-of-the-reference-margin-limit/