Caution - AAFC closely monitoring AgriStability claims

May 26, 2017 - Canadian Horticultural Council

The Canadian Horticultural Council has advised that it has recently come to light that Agriculture and Agri-Food Canada (AAFC) has been tracking the use of Business Risk Management tools by farmers. In particular, AAFC has been interested in knowing when an AgriStability claim has been submitted, and whether these growers have been accessing their AgriInvest accounts first when they have a serious loss of reference margin.
 
In government's view, when disaster strikes, a grower should first access AgriInsurance, if they have it, and then AgriInvest. A grower should only submit an AgriStability claim once these two resources have been leveraged.
  The tracking suggests that the opposite is occurring. AAFC officials are increasingly concerned that many growers who trigger AgriStability do not use money in their AgriInvest accounts first. This situation is broad across various crop types and sectors. At present, AgriInvest account balances are at $2 billion, which includes grower and government funds. The fund balances appear to have stabilized for now but, if they continue to grow, difficulties may arise.
 
For those who remember, we lost the Net Income Stabilization Account (NISA) program in 2009 when account balances reached $3 billion. CHC would also like to point out that it is very difficult to request that government return AgriStability and AgriInvest contributions to previous levels if the programs are not used adequately.
 
AAFC is flagging this issue. Please review carefully how your growers are using these tools, and consider that there may be better investment opportunities than storing funds in AgriInvest, and take action as you deem appropriate.