How it works 

AgriStability protects you when your net farming income falls below 85 percent of your recent average. To determine if you have a decline in your net farming income, two margins are calculated.

Calculating your production margin

Production margin = Allowable income – allowable expenses + accrual adjustments

Allowable income and expenses are directly related to the production of a commodity. The income and expenses you reported on your tax form are used to calculate your production margin.

To reflect any changes in the value of your inventory, accrual adjustments are calculated and added to your production margin. Fair market values provided by the Ontario Ministry of Agriculture, Food and Rural Affairs are used to value your accrual adjustments.

Calculating your reference margin

Reference margin = An average of your recent production margins
Your reference margin is based on an average of your previous five production margins, excluding the highest and lowest years. If you change your farm’s production capacity, your reference margin is adjusted to match your new production capacity.

Farming less than five years?
Your reference margin is based on your previous three production margins.

Farming less than three years?
Industry average margins (per unit) are used to construct up to three production margins for your operation.

Changes in your operation?
If there is a significant change in your operation, your reference margin may not reflect your current production capacity. If you have expanded your farm, your reference margin is increased. If you have downsized, your reference margin is decreased.

Triggering payments

If your production margin is less than 85 percent of your reference margin, you trigger a payment.

How your payment is calculated

1. For declines of up to 15 percent of your reference margin, AgriStability does not provide payments.
2. For the next 15 percent, AgriStability pays 70 percent of your loss.
3. For the next 70 percent, AgriStability pays 80 percent of your loss.
4. If your production margin was less than zero, AgriStability pays 60 percent of your net farming loss for the year.

You receive the sum of your payments in each level, up to a maximum of $3 million.