It’s back to the future for AgriInvest, the descendant of the former NISA program.
Farmers must now open accounts at their local financial institutions to make their AgriInvest deposits for 2009.
The federal government has held producers’ accounts for two years but now it’s time for them to open their own.
That’s the way it was with NISA after it began nearly 20 years ago.
Ottawa recently began mailing notices to producers with information on how to make their 2009 AgriInvest deposits.
The mailings include an account initiation form. Producers must sign the forms and present them to participating financial institutions to open their new AgriInvest accounts.
The penalty-free deadline to submit applications is September 30, 2010. After that, the deadline to file with a penalty is December 31, 2010.
Once applications are processed, producers will receive AgriInvest deposit notices telling them the maximum amount they are entitled to deposit for the 2009 calendar year.
Producers have 90 days to open an account after receiving their deposit notices.
The federal government initiated AgriInvest after NISA, which began in 1991 and ended with the 2002 program year.
Ottawa paid out the $3.5 billion remaining in producers’ NISA accounts as of 2004. It launched the new program in 2007 with $600 million in federal kick-start funds. The amount actually sent out was just over $475 million, based on producer response.
In 2008, producers began making their own deposits. Participants are allowed to deposit up to 1.5 per cent of their allowable net sales for the year, which the government matches.
As of June 27, there was nearly $552.5 million in 140,558 AgriInvest accounts in all provinces except Quebec, where the program is delivered by the province. Manitoba had 16,720 accounts.
AgriInvest is perhaps less known than AgriStability, AgriInsurance and AgriRecovery, the other business risk management programs in the federal-provincial Growing Forward agricultural policy framework.
But it is proving popular and participation is strong, said Kerry Lynn Claydon, an AgriInvest spokesperson.
“It’s kind of flown under the radar somewhat, but at the same time it’s definitely putting a lot of funds into producer accounts that they can use when they need it most,” she said.
There are actually two funds in an AgriInvest account: the government contribution and the producer’s own contribution. Withdrawals from the government portion are taxable.
Claydon said AgriInvest is more flexible than NISA, which was seen as a rainy day savings account for farmers.
NISA had payment triggers for which producers had to qualify before they were eligible to request withdrawals.
With AgriInvest, producers can withdraw money when they want regardless of their financial situation, said Claydon.
“You can be having a fabulous year and take the money out and use it for your farm, whereas with NISA you had to be in a low-income year in order to trigger a request.”
Since the program began, there have been 62,162 producer withdrawals for a value of $221.7 million. [email protected]
“It’skindofflown undertheradar somewhat.”
– KERRY LYNN CLAYDON, AGRIINVEST SPOKESPERSON