March 14, 2023
Federal and provincial ministers agreed to raise the
AgriStability compensation rate from 70% to 80%, starting with the 2023 program year. This is an increase the government of Ontario supports, having provided the provincial portion since the 2020 program year.
It still costs only $315 for every $100,000 of reference margin.
What does the 10% increase mean?
To understand the effects of a 10% increase on the compensation rate, it's important to first understand how AgriStability payments are calculated.
There is a difference between the coverage level and the compensation rate.
It's simpler than some might think. At the end of the day, it works just like other insurance products. When people insure something valuable, they have a coverage level or deductible, and they get a payment if there is a loss that triggers one.
Farmers will keep getting the same coverage level from AgriStability. If their net income (production margin) falls below 70% of their historical net income (their reference margin), they may get a payment.
If a loss does trigger a payment, the payment is calculated with a payment rate. That rate has a different name depending on what is insured. For Production Insurance it's called a
claim price. For AgriStability, it's called a compensation rate.
If farmers get a payment, that is where the 80% compensation rate comes in.
The first bar shows what you are insuring is covered to the 70% coverage level. The second bar shows that if a shortfall in a year happens, a payment is triggered. The bar shows that the payment includes a 10% higher rate, as the compensation rate is now 80%.
How AgriStability works
AgriStability provides whole farm coverage that is designed to cover large declines in net income caused by production loss, increased costs or market conditions.
When looking at how AgriStability works, compared to Production Insurance, there are some similarities.
|AgriStability ||Production Insurance |
|What you insure||Income||Yield |
|Coverage level||70%||60% - 90% options|
|Payment Rate||Compensation Rate||Claim price |
|Payment||The shortfall × the payment rate |
AgriStability and Production Insurance have different purposes. One protects farmers from disastrous income loss. The other protects them from yield loss. But they both share the same insurance basics, as shown here.
One part shows two bars, representing how AgriStability works. The first bar shows what you are insuring is covered to the 70% coverage level. The second bar shows that if a shortfall in a year happens, a payment is triggered. The bar shows that the payment includes a 10% higher rate, as the compensation rate is now 80%.
The second part shows two bars and represents how Production Insurance works. The first bar shows the yield the customer is insuring is covered to the 70% coverage level. The second bar shows that if a yield shortfall happens in a year, a payment is triggered based on the claim price.
To learn more, visit the
AgriStability – How it works page.
How to sign up
To sign up for AgriStability, and be eligible for the increased compensation, submit an AgriStability New Participant Form by
April 30. Existing customers will get a renewal package in the mail.
Have questions about AgriStability?
Contact Agricorp today.