Help Guide - AgriStability Benefit Quick Estimator

Completing the Quick Estimator

Reference Margin

Follow these steps to determine your reference margin:

Step 1: Calculate a production margin for each of your previous years (up to five) as follows:

A: Subtract your Allowable Expenses from your Allowable Income^Footnote1

B: If you file to the Canada Revenue Agency (CRA) on the cash basis, you must add the following change in value^Footnote2 calculations to amount you calculated in step 1:

Change in crop inventory = (ending inventory multiplied by end of year price) minus (starting inventory multiplied by start of year price).
Change in livestock inventory = (ending inventory multiplied by end of year price) minus (starting inventory multiplied by start of year price). If you have breeding herd, your change in your breeding herd inventory is calculated differently from your market livestock. Change in breeding herd inventory = (ending inventory minus starting inventory) multiplied by end of year price.
Change in purchased inputs = end of year amount minus start of year amount.
Change in deferred income and receivables = ending receivables and deferred income minus starting receivables and deferred income.
Change in accounts payable = starting accounts payable minus ending accounts payable.

The above calculations can result in either a positive or negative value.

Production margin calculation example:

Allowable Income

$130,000

− Allowable Expenses

$90,000

= Net Income

$40,000

+ Change in purchased inputs

$1,000

+ Change in accounts receivable and deferred income

($6,000)

+ Change in accounts payable

$4,500

+ Change in crop inventory

($1,000)

+ Change in livestock inventory

($3,500)

= Production Margin

$35,000

Step 2: Calculate an average of your production margins as follows:

If you farmed in each of the previous five years, remove the highest and the lowest years, then average the remaining three years.
If you did not farm in each of the previous 5 years, average the previous 3 years.
If you did not farm in each of the previous 3 years, average the years you have available.

The average you calculate is your reference margin.

**Reference margin calculation example:**
2017	2018	2019	2020	2021
$25,000	$30,000	$20,000	$36,000	$35,000
include	include	exclude lowest	exclude highest	include
Reference margin	$25,000 + $30,000 + $35,000 = $90,000 ÷ 3 = $30,000

Program Year Margin

Follow these steps to calculate your program year margin:

Step 1: Subtract your Allowable Expenses from your Allowable Income^Footnote1

Step 2: If you file to the Canada Revenue Agency (CRA) on the cash basis, you must add the following change in value^Footnote2 calculations to the amount you calculated in step 1:

Change in crop inventory = (ending inventory multiplied by end of year price) minus (starting inventory multiplied by start of year price).
Change in livestock inventory = (ending inventory multiplied by end of year price) minus (starting inventory multiplied by start of year price). If you have breeding herd, your change in your breeding herd inventory is calculated differently from your market livestock. Change in breeding herd inventory = (ending inventory minus starting inventory) multiplied by end of year price.
Change in purchased inputs = end of year amount minus start of year amount.
Change in deferred income and receivables = ending receivables and deferred income minus starting receivables and deferred income.
Change in accounts payable = starting accounts payable minus ending accounts payable.

The above calculations can result in either a positive or negative value.

Program year calculation example:

Allowable Income

$90,000

− Allowable Expenses

$60,000

= Net Income

$30,000

+ Change in purchased inputs

$500

+ Change in accounts receivable and deferred income

($1,000)

+ Change in accounts payable

$200

+ Change in crop inventory

($5,500)

+ Change in livestock inventory

($1,200)

= Program Year Margin

$23,000

Partnership percentage

Enter your partnership percentage using one of the following methods:

Your percentage share of your partnership, if you entered your reference margin and program year margin based on 100% of your partnership.
Your partnership percentage as 100%, if you entered your reference margin and program year margin based on your share of the partnership.

For example: You are in a 50/50 partnership with your spouse. The partnership has the following:

Reference Margin:

$150,000

Program Year Margin:

$60,000

If you entered $150,000 for your reference margin and $60,000 for your program year margin, enter 50% in the partnership percentage box.

If you entered only your 50% share for your reference margin and program year margin, enter 100% in the partnership percentage box.

If you are using a Calculation of Benefits (COB) to complete the calculator the calculations on the COB were done using your partnership percentage. Therefore, enter 100% in the partnership percentage box.

Whole Farm percentage

Enter your whole farm^Footnote3 percentage using one of the following methods:

Your percentage share of the whole farm, if you entered your reference margin and program year margin based on 100% of the whole farm.
Your whole farm percentage as 100%, if you entered your reference margin and program year margin based on your share of the whole farm.

For example: You farm represents 50% of the whole farm. The whole farm has the following:

Reference Margin:

$150,000

Program Year Margin:

$60,000

If you entered $150,000 for your reference margin and $60,000 for your program year margin, enter 50% in the whole farm percentage box.

If you entered only your 50% share for your reference margin and program year margin enter 100% in the whole farm percentage box.

Change in farm size

Indicate if your farm size has:

Not changed by more than 10% since last year
Increased by more than 10% since last year
Decreased by more than 10% from last year

Percent change in farm size

Enter the percent change your farm size has increased or decreased. Percentage values entered in this field must be more than 10%.

Understanding the results calculations

Estimated Benefit

This is your estimated benefit. Payments are not issued for less than $250 or more than $3 million or 70% of the difference between the Reference Margin and the Program Year Margin (whichever is less).

Benefit calculation example

Program Years	2018-2022	2023-2027
Support Level	$39,200	$39,200
Program Year Margin with adjustments	$10,000	$10,000
Decline	$29,200	$29,200
AgriStability coverage	70%	80%
Estimated AgriStability Benefit	$20,440	$23,360

Reference Margin with adjustments

This is your reference margin after it has been adjusted for structural change, partnership share and/or whole farm share.

Support Level

Your support level is 70% of your reference margin with adjustments. Your program year margin must fall below your support level to trigger a benefit.

For example:

Reference Margin with adjustments

$56,000

70%

= Support Level

$39,200

Program Year Margin with adjustments

This is your program year margin after it has been adjusted for your partnership share and/or whole farm share.

Footnotes

Footnote 1

Allowable income and expenses
All agricultural commodities that are reportable to the CRA as farming income are considered eligible commodities for Program purposes, with the following exceptions:

Commodities generated through aquaculture;
Trees produced or harvested for use in reforestation, or for firewood, construction material, poles or posts, fibre, or pulp and paper;
Peat moss;
Cannabis (except for industrial hemp);
Livestock sold in the operation of a wild game reserve; and
Income and expenses related to the production of any agricultural commodity outside of Canada.

The production margin is calculated as the difference between allowable income and allowable expenses in a program year. Income and expense items that are considered allowable for Program purposes include:

Allowable income
- Agricultural commodity sales
- Rebates for allowable expenses
- AgriInsurance proceeds
- Insurance or other proceeds for allowable income and expense items
- Wildlife damage compensation payments
Allowable expenses
- Commodity purchases
- Containers and twine
- AgriInsurance premiums
- Insurance or other premiums for allowable income and expense items
- Pesticides
- Fertilizer and soil supplements
- Veterinary fees, medicine, breeding fees
- Minerals and salts
- Machinery gasoline, diesel fuel, oil
- Electricity
- Freight and shipping
- Heating fuel
- Arm's length salaries
- Storage/drying
- Trucking (including contract trucking) that is used to transport eligible commodities to market or eligible inputs to the farm
- Feed
- Commodity futures transaction fees

Return to first footnote 1 referrer

Footnote 2

Valuing Your Inventory
To value your inventory, use the AgriStability Price List that can be downloaded from the Administration's web site.

Return to first footnote 2 referrer

Footnote 3

Whole Farm
AgriStability is a whole farm program. That means we may combine your farm with another farm even if the operations report separately for income tax.
Generally, you a considered part of a whole farm if your farm:

is legally, financially, or operationally dependent on another farming operation
has transactions with other farms that are not at fair market value
shares the same land or equipment with other farms

Return to footnote 3 referrer