How do farmers use AgriInvest and how can the business risk management program be improved?
That’s what the Canadian Federation of Agriculture (CFA) wants to learn from a survey of farmers as it prepares for the next federal-provincial-territorial farm program starting April 1, 2018, replacing Growing Forward 2.
“We want to make sure we are ready and as informed as we can be early in the process because negotiations and discussions around the frameworks start quite early,” Scott Ross, CFA’s director of Business Risk Management and Farm Policy said in an interview from his Ottawa office Aug. 25, 2015.
CFA has set out in broad terms policies it wants the next federal government to implement on behalf of farmers, but more work needs to be done with officials on the details.
“This is where we feel the survey will feed into it — getting those details and making sure that we have the most accurate picture we can of how producers use the program and how they want to use the program and the challenges they face with it right now.”
AgriInvest evolved from the defunct Net Income Savings Account (NISA). Under AgriInvest, farmers can deposit 100 per cent of their allowable net sales annually into a savings account with up to one per cent of their deposit, to a maximum of up to $15,000, matched by the federal and provincial governments. (Governments in the past matched 1.5 per cent of allowable net sales.)
AgriInvest is a self-managed producer-government savings account that allows producers to set money aside so it can be used to recover from a small drop in income, or to make investments to reduce on-farm risks, Agriculture and Agri-Food Canada says on its AgriInvest website.
It’s up to farmers if they want to withdraw money from the AgriInvest account. When they do they must withdraw the government contribution first and it’s taxable.
CFA is proposing the following changes to the program:
- Increase the maximum matched producer contribution rate to 4.5 per cent of allowable net sales.
- Set the maximum allowable matching contribution to $100,000.
- Encourage investments into a set of pre-approved, proactive risk mitigation and income generation investment opportunities by allowing producers to access their own AgriInvest contributions without triggering taxable government funds.
“We see at CFA a strong role to increase the value of what AgriInvest offers to producers in terms of an investment tool that helps them manage a whole wide array of different issues that are coming up in terms of on-farm costs,” Ross said.
“But we wanted to get a better understanding of what kind of assets and investments they are making right now with the program to see how it has been used to date, and also get some insights as to whether the current amounts are sufficient to really meet the goals.”
Farmers are busy with harvest now, but the web-based survey, which can be done on a mobile device as well as a computer, takes just three to five minutes to complete, Ross said.
CFA’s Manitoba affiliate, Keystone Agricultural Producers, has used social media to inform its members of the survey, which can be found on the home page of CFA’s website or at this Google Doc ‘CFA Survey on AgriInvest.’