Programs
Risk Management Program

The Risk Management Program (RMP) is a price support program for grain and oilseed producers to help offset losses caused by low commodity prices. RMP is a three-year pilot program starting in 2007. Payments will be triggered when prices for grains and oilseeds fall below a specific support level based on a cost of production formula.

RMP was designed in consultation with the Ontario Federation of Agriculture and representatives of the grain and oilseed sector and is part of a complete risk management package offered to Ontario producers. For that reason, producers who want to participate in the new program are required to be enrolled in both AgriStability and Production Insurance (PI).

Contents

Eligibility and program requirements

To participate in the Risk Management Program, producers must:

  1. Grow at least one of the 27 eligible grain and oilseed crops.
  2. Enrol all of their eligible grain and oilseed crops.
  3. Pay the premium that corresponds to their chosen coverage level.
  4. Participate in both AgriStability and Production Insurance.
    • Because a number of the "minor crops" do not have Production Insurance plans available for them, that requirement will be waived for any year in which no Production Insurance plan exists for a particular crop.
  5. Participate in marketing and/or financial planning courses as required by the Ontario Ministry of Agriculture, Food and Rural Affairs. The details of this requirement will be worked out with industry representatives at a later date.

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Eligible crops

Eligible crops have been classified as either major or minor, depending on the availability of cost of production and market price data.

Eligible Crops
Major Crops Minor Crops
  • Black beans
  • Canola
  • Coloured beans (unidentified by market class)
  • Corn (grain corn and farm-fed)
  • Cranberry beans
  • Japan/other beans
  • Kidney beans
  • Soybeans
  • Spring grain (oats, barley, and mixed grain)
  • Spring wheat
  • White beans
  • Hard red winter wheat
  • Organic winter wheat
  • Soft red winter wheat
  • Soft white winter wheat
  • Buckwheat
  • Faba beans
  • Field peas
  • Flax
  • Millet
  • Mustard
  • Rye (for harvest as grain)
  • Seed and popping corn
  • Sorghum
  • Spelt
  • Sunflowers
  • Triticale
Notes:
  • Farm-fed crops are eligible. Crops grown for plow-down are excluded.
  • Major and minor crops are treated differently with respect to premiums, support levels, and payments.

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Coverage and support levels

Four coverage levels are available for each grain and oilseed crop: 100, 95, 90, or 85 percent of the cost of production. Participant coverage levels will be rolled over based on the previous year's coverage level for that crop.

A participant may change their coverage level for 2009 by calling Agricorp by May 1, 2009. Participants may choose different coverage levels for different crops. Coverage levels under RMP are not tied to PI coverage levels.

The support level used to calculate RMP payments is equal to the cost of production multiplied by the chosen coverage level.

2009 Support Levels ($/unit) by Coverage Level
Major Crop 100% 95% 90% 85%
Black beans ($/lb) 0.3299 0.3134 0.2969 0.2804
Canola ($/lb) 0.1920 0.1824 0.1728 0.1632
Corn, seed corn ($/bu) 4.48 4.26 4.03 3.81
Cranberry beans ($/lb) 0.4057 0.3854 0.3651 0.3448
Hard red winter wheat ($/bu) 4.87 4.62 4.37 4.12
Japan/other beans ($/lb) 0.4057 0.3854 0.3651 0.3448
Kidney beans ($/lb) 0.4057 0.3854 0.3651 0.3448
Organic winter wheat ($/bu) 4.67 4.42 4.17 3.92
Popping corn ($/lb) 0.2000 0.1903 0.1800 0.1700
Soft red winter wheat ($/bu) 4.67 4.42 4.17 3.92
Soft white winter wheat ($/bu) 4.77 4.52 4.27 4.02
Soybeans ($/bu) 9.67 9.19 8.70 8.22
Spring grain ($/lb) 0.0898 0.0853 0.0808 0.0763
Spring wheat ($/bu) 6.11 5.80 5.50 5.19
White beans ($/lb) 0.3299 0.3134 0.2969 0.2804

2008 Support Levels ($/unit) by Coverage Level
Major Crop 100% 95% 90% 85%
Black beans ($/lb) 0.3078 0.2924 0.2770 0.2616
Canola 0.1840 0.1748 0.1656 0.1564
Corn, seed corn,and popping corn ($/bu)1 4.29 4.08 3.86 3.65
Cranberry beans ($/lb) 0.4349 0.4132 0.3914 0.3697
Hard red winter wheat ($/bu) 4.71 4.47 4.23 4.00
Japan/other beans ($/lb) 0.4349 0.4132 0.3914 0.3697
Kidney beans ($/lb) 0.4349 0.4132 0.3914 0.3697
Soft red winter wheat ($/bu) 4.51 4.28 4.05 3.83
Soft white winter wheat ($/bu) 4.61 4.37 4.14 3.91
Soybeans ($/bu) 9.19 8.73 8.27 7.81
Spring grain ($/lb) 0.0850 0.0808 0.0765 0.0723
Spring wheat ($/bu) 5.91 5.61 5.32 5.02
White beans ($/lb) 0.3078 0.2924 0.2770 0.2616
Notes:

1Popping corn premiums use the same rates as commercial corn.

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Premiums

To reflect industry's RMP proposal, the program will require an annual premium to be paid before a payment is issued. Premiums for each commodity will be calculated by taking 12 percent (40 percent of 30 percent) of the difference between the chosen support level and the most recent 10‑year average market price. The 40 percent represents the provincial government's normal share of funding in a cost-shared program. The 30 percent factor was proposed by the industry to represent a producer's one-third share of the premium.

The premium rate is the amount producers will pay once to receive benefit from two pricing period payments in a program year. The total minimum premium a participant can pay per crop is $25. For RMP, the minimum premium rate is $0.01/bu or $0.0002/lb.

2009 Premium Rates ($/unit) by Coverage Level
Major Crop 100% 95% 90% 85%
Black beans ($/lb) 0.0087 0.0067 0.0047 0.0027
Canola ($/lb) 0.0057 0.0046 0.0034 0.0023
Corn, seed corn ($/bu) 0.13 0.11 0.08 0.05
Cranberry beans ($/lb) 0.0134 0.0109 0.0085 0.0061
Hard red winter wheat ($/bu) 0.12 0.09 0.06 0.03
Japan/other beans ($/lb) 0.0134 0.0109 0.0085 0.0061
Kidney beans ($/lb) 0.0134 0.0109 0.0085 0.0061
Organic winter wheat ($/bu) 0.10 0.07 0.04 0.01
Popping corn ($/lb) 0.0023 0.0020 0.0014 0.0009
Soft red winter wheat ($/bu) 0.10 0.07 0.04 0.01
Soft white winter wheat ($/bu) 0.11 0.08 0.05 0.02
Soybeans ($/bu) 0.21 0.15 0.09 0.03
Spring grain ($/lb) 0.0037 0.0031 0.0026 0.0020
Spring wheat ($/bu) 0.16 0.12 0.09 0.05
White beans ($/lb) 0.0087 0.0067 0.0047 0.0027

2008 Premium Rates ($/unit) by Coverage Level
Major Crop 100% 95% 90% 85%
Black beans ($/lb) 0.0070 0.0052 0.0033 0.0015
Canola ($/lb) 0.0053 0.0042 0.0031 0.0020
Corn and seed corn ($/bu)1 0.12 0.09 0.07 0.04
Cranberry beans ($/lb) 0.0177 0.0151 0.0125 0.0099
Hard red winter wheat ($/bu) 0.13 0.11 0.08 0.05
Japan/other beans ($/lb) 0.0177 0.0151 0.0125 0.0099
Kidney beans ($/lb) 0.0177 0.0151 0.0125 0.0099
Popping corn ($/lb)1 0.0021 0.0017 0.0012 0.0007
Soft red winter wheat ($/bu) 0.11 0.08 0.06 0.03
Soft white winter wheat ($/bu) 0.12 0.09 0.07 0.04
Soybeans ($/bu) 0.17 0.12 0.06 0.01
Spring grain ($/lb) 0.0034 0.0029 0.0024 0.0019
Spring wheat ($/bu) 0.17 0.14 0.10 0.07
White beans ($/lb) 0.0070 0.0052 0.0033 0.0015
Notes:

1Seed corn and Popping corn premiums use the same rates as commercial corn.

Premiums for minor crops

Minor crops will be treated using a proxy approach: premiums and payments will be assessed as if the grower had planted the major crop that covers the largest area in their county, with the exceptions of seed and popping corn. Seed and popping corn will always be assessed as if grain corn had been planted. This methodology is consistent with that used under the former Market Revenue Insurance program.

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Market prices

For most eligible commodities, two payments will be issued for each crop year, typically fall and spring. The first (typically fall) payment will be based on the average of forward contract prices for six months prior to harvest of each commodity. The second (typically spring) payment will be based on the average of cash or spot prices for six months during and after harvest. The specific months that compose these six-month periods will depend on the harvest date of each commodity and are listed in the Payment Periods table.

2009 Pre-Harvest Market Prices
Support Levels
Major Crop 100% 95% 90% 85% Pre-harvest
Market Prices
Black beans ($/lb) 0.3299 N/A N/A N/A 0.3372
Canola ($/lb) 0.1920 0.1824 N/A N/A 0.1910
Corn and seed corn ($/bu) 4.48 4.26 4.03 N/A 4.12
Cranberry beans ($/lb) 0.4057 N/A N/A N/A 0.4115
Hard red winter wheat ($/bu) 4.87 N/A N/A N/A 5.15
Japan/other beans ($/lb) 0.4057 0.3854 N/A N/A 0.4044
Kidney beans ($/lb) 0.4057 N/A N/A N/A 0.4672
Popping corn ($/lb) 0.2000 0.1903 0.18 N/A 0.184
Soft red winter wheat ($/bu) 4.67 N/A N/A N/A 4.89
Soft white winter wheat ($/bu) 4.77 N/A N/A N/A 5.02
Soybeans ($/bu) 9.67 N/A N/A N/A 10.08
Spring grain ($/lb) 0.0898 0.0853 0.0808 0.0763 0.0798
Spring wheat ($/bu) 6.11 N/A N/A N/A 6.79
White beans ($/lb) 0.3299 N/A N/A N/A 0.3465

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2008 Post-Harvest Market Prices
Support Levels
Major Crop 100% 95% 90% 85% Post-harvest
Market Prices
Black beans ($/lb) 0.3078 0.2924 0.2770 0.2616 0.3879
Canola ($/lb) 0.1840 0.1748 0.1656 0.1564 0.1902
Corn and seed corn ($/bu) 4.29 4.08 3.86 3.65 4.11
Cranberry beans ($/lb) 0.4349 0.4132 0.3914 0.3697 0.4767
Hard red winter wheat ($/bu) 4.71 4.47 4.23 4.00 5.16
Japan/other beans ($/lb) 0.4349 0.4132 0.3914 0.3697 0.4856
Kidney beans ($/lb) 0.4349 0.4132 0.3914 0.3697 0.4878
Popping corn ($/lb) 0.1915 0.1820 0.1722 0.1627 0.1835
Soft red winter wheat ($/bu) 4.51 4.28 4.05 3.83 4.92
Soft white winter wheat ($/bu) 4.61 4.37 4.14 3.91 4.92
Soybeans ($/bu) 9.19 8.73 8.27 7.81 10.23
Spring grain ($/lb) 0.0850 0.0808 0.0765 0.0723 0.0932
Spring wheat ($/bu) 5.91 5.61 5.32 5.02 7.09
White beans ($/lb) 0.3078 0.2924 0.2770 0.2616 0.3908

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2008 Pre-harvest Market Prices
Support Levels
Major Crop 100% 95% 90% 85% Pre-harvest
Market Prices
Black beans ($/lb) 0.3078 0.2924 0.2770 0.2616 0.4040
Canola ($/lb) 0.1840 0.1748 0.1656 0.1564 0.2614
Corn and seed corn ($/bu) 4.29 4.08 3.86 3.65 5.42
Cranberry beans ($/lb) 0.4349 0.4132 0.3914 0.3697 0.5126
Hard red winter wheat ($/bu) 4.71 4.47 4.23 4.00 6.85
Japan/other beans ($/lb) 0.4349 0.4132 0.3914 0.3697 0.4883
Kidney beans ($/lb) 0.4349 0.4132 0.3914 0.3697 0.5298
Popping corn ($/lb) 0.1915 0.1820 0.1722 0.1627 N/A
Soft red winter wheat ($/bu) 4.51 4.28 4.05 3.83 6.76
Soft white winter wheat ($/bu) 4.61 4.37 4.14 3.91 6.83
Soybeans ($/bu) 9.19 8.73 8.27 7.81 11.92
Spring grain ($/lb) 0.0850 0.0808 0.0765 0.0723 0.0902
Spring wheat ($/bu) 5.91 5.61 5.32 5.02 8.64
White beans ($/lb) 0.3078 0.2924 0.2770 0.2616 0.4333

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2007 Post-Harvest Market Prices
Major Crop1 Support Level Market Price Provincial
Payment
Amount2
Black beans ($/lb) 0.3048 0.2861 0.00748
Canola ($/lb) 0.1772 0.1831 N/A
Coloured beans ($/lb)(unidentified by market class) 0.3753 0.3927 N/A
Corn and seed corn ($/bu)3 4.08 3.95 0.05200
Cranberry beans ($/lb) 0.3831 0.4149 N/A
Japan/other coloured beans ($/lb) 0.3831 0.3481 0.01400
Kidney beans ($/lb) 0.3831 0.4060 N/A
Popping corn ($/lb)4 N/A N/A 0.00240
Soybeans ($/bu) 9.19 10.75 N/A
Spring grain ($/lb) 0.0737 0.0784 N/A
Spring wheat ($/bu) 5.47 7.64 N/A
White beans ($/lb) 0.3048 0.2970 0.00312
Winter wheat ($/bu) 4.71 7.14 N/A
Notes:

1 Minor crops (buckwheat, faba beans, field peas, flax, millet, rye, sorghum, spelt, sunflowers, triticale) are based on the major crop that covers the largest area in your county (e.g., proxy crop).

2 Provincial Payment Amount is the price difference (Support Level - Market Price) times 40% to reflect Ontario's share.

3 Seed corn is based on corn prices.

4Popping corn is based on the Provincial Payment Amount for corn multiplied by a factor of 2.5.

2007 Pre-Harvest Market Prices
Major Crop1 Support Level Market Price Provincial
Payment
Amount2
Black beans ($/lb) 0.3048 0.2833 0.0086
Canola ($/lb) 0.1772 0.1632 0.0056
Coloured beans ($/lb)(unidentified by market class) 0.3753 0.3543 0.0084
Corn and seed corn ($/bu)3 4.08 3.37 0.2840
Cranberry beans ($/lb) 0.3831 0.3633 0.0079
Japan/other coloured beans ($/lb) 0.3831 0.3583 0.0099
Kidney beans ($/lb) 0.3831 0.3617 0.0086
Popping corn ($/lb)4 N/A N/A 0.0127
Soybeans ($/bu) 9.19 8.18 0.4040
Spring grain ($/lb) 0.0737 0.0645 0.0037
Spring wheat ($/bu) 5.47 5.58 N/A
White beans ($/lb) 0.3048 0.2767 0.0112
Winter wheat ($/bu) 4.71 5.08 N/A
Notes:

1 Minor crops (buckwheat, faba beans, field peas, flax, millet, rye, sorghum, spelt, sunflowers, triticale) are based on the major crop that covers the largest area in your county (e.g., proxy crop).

2 Provincial Payment Amount is the price difference (Support Level - Market Price) times 40% to reflect Ontario's share.

3 Seed corn is based on corn prices.

4 Popping corn is based on the Provincial Payment Amount for corn multiplied by a factor of 2.5.

Agricorp calculates your RMP payment using percentages, and rounds figures up or down. If you use the published Provincial Payment Amount figures to estimate your payment, your estimate may be close but different than the Calculated Amount shown on the RMP Statement.

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Payment Periods
Major Crop Spring Pricing Period (First Pricing Period) Fall Pricing Period (Second Pricing Period)
Black beans March - August September - February
Canola January - June July - December
Coloured beans (unidentified by market class) March - August September - February
Corn April - September October - March
Cranberry beans March - August September - February
Hard red winter wheat January - June July - December
Japan/other beans March - August September - February
Kidney beans March - August September - February
Soft red winter wheat January - June July - December
Soft white winter wheat January - June July - December
Soybeans April - September October - March
Spring grain February - July August - January
Spring wheat January - June July - December
White beans March - August September - February

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Sources of Forward Contract Prices and Harvest Spot Prices
Major Crop Forward Contract Prices and Harvest Spot Prices
Black beans Average of monthly prices for delivery at a cross-section of Ontario elevators
Canola Average of monthly prices for delivery at a cross-section of Ontario elevators
Coloured beans (unidentified by market class) Average of monthly prices for delivery at a cross-section of Ontario elevators
Corn Daily averages for Chatham delivery
Cranberry beans Average of monthly prices for delivery at a cross-section of Ontario elevators
Japan/other beans Average of monthly prices for delivery at a cross-section of Ontario elevators
Kidney beans Average of monthly prices for delivery at a cross-section of Ontario elevators
Soybeans Daily averages for Chatham delivery
Spring grain Average of monthly prices for delivery at a cross-section of Ontario elevators of Barley and Oats
Spring wheat Daily averages for Board terminal delivery of Red Spring
White beans Average of monthly prices for delivery at a cross-section of Ontario elevators
Winter Wheat (Hard red, soft white, soft red, and Organic) Daily delivery prices are used to determine a weighted average price from the following locations: the Ontario Wheat Board Terminal (25% weight), private terminals (25% weight), and country elevators (50% weight)

Notes:
  • On days when the price source doesn't offer bids or forward contracts, RMP will omit those daily prices when calculating the actual market prices.
  • After consulting with industry groups, OMAFRA used an alternative price source to calculate the 2008 post-harvest market prices for white and coloured beans. For September, market prices are still based on the prices posted by a cross-section of elevators across Ontario, as reported by OABA. For October 2008 to February 2009, prices are based on the average prices of beans sold, as reported by the Ontario Bean Producers' Marketing Board.

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Payment calculation

Payments are triggered when the market price falls below the support level. Each payment will be based on:

(a) 50 percent of the participant's average farm yield
(b) the participant's acreage
(c) the difference between the support level and the average market price of the preceding six months.

The payment is equal to (a) × (b) × (c), which is then multiplied by 40 percent to reflect Ontario's share.

Example - Pre-harvest pricing period

Assuming corn is the only commodity produced by this participant, and:

  • Average Farm Yield (Historical 10-year): 150 bushels per acre
  • Crop Year Acreage (Corn): 100 acres
  • Support Level (Cost of Production Based): $4.08 per bushel
  • Average Market Price: $3.37 per bushel
  • Price differential (between support level and average market price): $4.08 - $3.37 = $0.71

Given that there are two payments per year, the following would represent the pre-harvest payment:

  • RMP Payment = Average Farm Yield x 50% x Crop Year Acreage x Price Difference x 40% Provincial Share
  • RMP Payment = 150 bu/acre x 50% x 100 acres x $0.71/bu x 40%
  • RMP Pre-harvest Payment = $2,130

Example - Post-harvest pricing period

Assuming corn is the only commodity produced by this participant, and:

  • Average Farm Yield (Historical 10-year): 150 bushels per acre
  • Crop Year Acreage (Corn): 100 acres
  • Support Level (Cost of Production Based): $4.08 per bushel
  • Average Market Price: $3.95 per bushel
  • Price differential (between support level and average market price): $4.08 - $3.95 = $0.13

Given that there are two payments per year, the following would represent the pre-harvest payment:

  • RMP Payment = Average Farm Yield x 50% x Crop Year Acreage x Price Difference x 40% Provincial Share
  • RMP Payment = 150 bu/acre x 50% x 100 acres x $0.13/bu x 40%
  • RMP Pre-harvest Payment = $390

The total RMP payment for 2007 (including pre- and post-harvest payments) = $2,520 (390 + 2,130).

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Payment caps

The grain and oilseed industry has recommended that the Risk Management Program include an annual cap on the total payment a producer may receive:

  • $130,000 per individual (sole proprietors)
  • $390,000 (maximum of three individuals per corporation or partnership)

Individual RMP payments of less than $10 will not be paid out.

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RMP payments and AgriStability payments

RMP payments are counted as an advance on the provincial portion of a participant's AgriStability benefit for the corresponding program year. Participants keep the greater of either the RMP payment or the provincial AgriStability benefit. In either case, the final statement will show what portion of the payment is attributed to AgriStability and what portion to RMP.

Example 1:

RMP payment greater than provincial AgriStability benefit

If the combined RMP payment is greater than the provincial portion of the final AgriStability benefit for the corresponding year, the participant will not receive the provincial portion of the AgriStability benefit, but will keep the additional RMP payment

Example 2:

RMP payment less than provincial AgriStability benefit

If the combined RMP payment is less than the provincial portion of the final AgriStability benefit for the corresponding year, the participant will receive the provincial portion of AgriStability, but not the RMP payment.

RMP has no impact on the federal portion of AgriStability benefits.

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RMP payments and overpayments

Overpayments from other provincial programs (for example, previous CAIS or AgriStability advances) will be recovered from RMP payments.

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Applications and renewals

Renewal packages for the 2009 Risk Management Program are sent to grain and oilseed producers who participated in RMP in 2008.

The deadline to apply for the 2009 crop year is May 1, 2009.

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