AgriStability: Step 4. After you apply

Step 4. After you apply

1. Agriculture and Agri-Food Canada will calculate your benefit

Agriculture and Agri-Food Canada (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%.

Production margin

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?

Reference margin

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.

For more information on reference margins, 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?

Combining participants

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 AgriStability payment you can receive (including combined operations) is the lower of:

• $3 million
• 70% of your margin decline

The maximum AgriStability payment includes both positive and negative margin payments.

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.