Publications

Agricorp presents… AgriStability Video Shorts

Understanding elements of the program.

This video short focuses on…

• Allowable income
• Allowable expenses

AgriStability protects you when your net income falls below 70% of your recent average income.

Allowable income and allowable expenses are directly related to agriculture production. This is so the program works as intended. Supporting farmers when disasters affect their bottom line.

Income and expenses not directly related to agriculture production are non-allowable under AgriStability, like…

• Building and machinery repairs
• Investment income
• Capital expenses
• Rent
• Interest

So what is allowable income under AgriStability? Things like…

• The sale of agriculture commodities
• Production Insurance payments

So what is an allowable expense under AgriStability? Things like…

• Feed
• Seed
• Fertilizers and soil supplements
• Pesticides and chemical treatments
• Containers and twine
• Heating fuel
• Electricity
• Freight and shipping
• Arm’s length salaries
• Storage and drying
• Fuel for machinery

Farming is a complex business.

Every farm is unique

For questions specific to your farm, contact Agricorp and read the AgriStability publications on agricorp.com.

We’re here to help.

Agricorp presents… AgriStability Video Shorts

Understanding elements of the program

This video short focuses on Production margin and Reference margin

In general terms, AgriStability protects you when your net income falls below 70% of your recent average income.

In AgriStability terms:

• your net income in a year is your Production Margin
• your average net income is your Reference Margin

Production Margin and Reference Margin are terms unique to AgriStability.

Knowing them can help you better understand the program.

Let's replace general terms with AgriStability terms: AgriStability protects you when your net income Production Margin falls below 70% of your recent average income

Reference Margin

Now we’ll take a look at how these margins are calculated

What is a Production Margin based on? Allowable income minus allowable expenses

A single year's business information

Tax information

Info you submit on AgriStability forms

Your inventory adjustments (ending minus opening)

How is the Production Margin calculated?

Let's use the 2023 program year as an example:

2023 allowable income
- (2023 allowable expenses)
+ 2023 inventory adjustments
= 2023 Production Margin

So what is a reference margin based on?

Before we get into that, remember...

AgriStability protects you when your Production Margin falls below 70% of your Reference Margin

So what is a Reference Margin based on?

(Example)

• Your 5 most recent years
• The corresponding Production Margin
• The low and high values removed
• An average of the remaining numbers
• This is called an Olympic average

New to farming?

Those are the basics on Production Margin and Reference Margin

But how are they used in AgriStability to quantify a loss?

Watch our video on how payments are calculated.

Farming is a complex business.

Every farm is unique.

For questions specific to your farm, contact Agricorp and read the AgriStability publications on agricorp.com

We’re here to help

Agricorp presents….AgriStability Video Shorts

Understanding elements of the program

This video short focuses on How payments are calculated

AgriStability protects you when your net income falls below 70% of your recent average income

So how are payments calculated? It's simpler than you might think

But before we get into that, it's good to know AgriStability actually works a lot like other insurance you may have

• You insure something valuable
• you have a coverage level or deductible
• and you get a payment if a loss triggers it.

What's unique about AgriStability?

Instead of covering 1 commodity at a time, AgriStability helps cover income loss of the whole farm, when disasters happen.

When you compare AgriStability to another program you may know, Production Insurance you'll see they share the same insurance basics.

Now that we see AgriStability works a lot like other insurance, let’s get back to our original question…

How do payments work?

What you’re insuring is your average net income (reference margin)

• Your coverage level is 70%
• When shortfalls trigger payments
• Your payment trigger is your coverage level
• You have this year’s net income (production margin)
• And an income shortfall (margin decline)
• Your payment is your shortfall x the compensation rate

The compensation rate is 10% higher!

Sidebar: if you know Production Insurance

Showing the same insurance basics at work

What you’re insuring is your average yield

Suppose you have a coverage level of 70%

When shortfalls trigger payments

You have a payment trigger (guaranteed production)

If this year’s yield has a yield shortfall, your payment is your shortfall x the claim price

Let's add example numbers

Average net income: $200,000

Payment trigger: $140,000

This year's net income: $100,000

Net income shortfall: $40,000

$40,000 shortfall X

80% compensation rate

Payment of $32,000

Starting with the 2023 program year, the government increased the compensation rate to 80%

So that’s how payments are calculated and how AgriStability can help protect your farm's income

Farming is a complex business

Every farm is unique

For questions specific to your farm, contact Agricorp...

and read the AgriStability publications on agricorp.com

We’re here to help

Agricorp presents ... AgriStability Video Shorts

Understanding elements of the program

This video short focuses on...

The tax-aligned reference margin option

Hi. I’m Jeff Janssen

I’m a Senior Program & Policy Specialist at Agricorp, with a focus on AgriStability

I’ve been involved with the program, in some form or another, for the last 15 years

Thank you for tuning in today.

I’m excited to share an AgriStability update with you today – one that brings good news

New in 2025, the government introduced a new option for participating in AgriStability.

It’s called the tax-aligned reference margin.

This new option makes it easier to participate in AgriStability by aligning your reference margin with your tax data.

What does this mean for you?
It means 3 things.

1. You’ll have better predictability
2. You’ll have less information to collect and submit
3. And you’ll have less paperwork if you don’t have a claim

But... before I explain the details, I’d like to give you a quick summary of what a reference margin is. This might also help if you’re new to AgriStability....

Your reference margin is essentially your average net income

And It’s based on your 5 most recent years, with the low and high values removed.
Then we take an average of the remaining numbers  

If you’re new to AgriStability, we may use your last 3 years

To learn more about AgriStability margins, check out the video shorts on our website

Now let’s get back to the benefits of having a tax-aligned reference margin

The first benefit is better predictability

With this new option, Agricorp will send you a Coverage Notice Estimate in the fall of each program year

The coverage notice estimate has 2 key pieces of information that will help you better understand your AgriStability claim position.

The first is your estimated reference margin. This tells you your estimated average net income, based on the tax information you filed.

The second is your estimated payment trigger. This tells you the level of net income loss that would trigger a payment.

With this information, you’ll know your claim position sooner, giving you better predictability

Let’s move on to the second benefit of having less information to collect and submit

If you choose the tax-aligned reference margin, Agricorp will use the historical income and expenses you file for taxes to calculate your estimated Reference Margin

So what’s the benefit of that?

It means your AgriStability numbers will match the accounting method you use for taxes

Which in turn, means you will have less information to collect and submit for AgriStability.

To dig into this a little deeper it means:

If you use a cash method of accounting for taxes, you’ll no longer have AgriStability adjustments made to account for things like

• Crop and livestock inventory
• Purchased inputs, and
• Accounts receivable and accounts payable

If you use an accrual method of accounting for taxes, you‘ll no longer have a breeding herd adjustment applied to your Reference Margin

The third benefit of the tax-aligned reference margin option is less paperwork if you don’t have a claim

If you predict that you won’t be in a claim position, you won’t need to submit the AgriStability year-end claim form.

So what questions might you ask yourself when predicting your claim position?

Keep in mind that AgriStability is intended to cover large declines in net income cause by production loss, increased costs, and market conditions.

You should ask yourself:

• Will my farm’s net income be lower than my payment trigger?
• Did my farm have production or market losses throughout the year?
• Did my farm have losses that affected the whole farm operation?
• Did my farm have a significant increase in costs affecting my net income?
• Does my farm have accruals (like inventory adjustments) that could affect my net income?

If you answer “no” to these questions, you may not be in a payment position.

And you can choose not to file your year-end claim paperwork – saving you time and money!

You can also check the AgriStability Quick Estimator tool on Agriculture and Agri-Food Canada’s website to predict your claim position.

The Quick Estimator is an easy 1-page calculator. Simply enter your information to get an estimated payment amount.

Search for the AgriStability Quick Estimator online to find it.

So, you may be wondering what happens if you do predict your net income to be close to or under the payment trigger in your …?

If your farm business is in this difficult situation, it would be in your best interest to file the year-end claim form by June 30 of the following program year.

If you are in this situation, you can also consider applying for an interim payment, which is an advance on your final estimated payment.

This will start your claim process, as usual.

To take advantage of this easier way to participate in AgriStability

• Go to Agricorp.com.
• Click the card on the homepage

Complete the digital Selection Form and email it to us.

It won’t take you more than 5 minutes to get better predictability and less paperwork if you don’t have a claim.

So that’s what the tax-aligned reference margin is all about.

Thank you for joining me today.