Crop Insurance, the Canadian Agricultural Income Stabilization (CAIS) program, the Advance Payments Program (APP), the National Water Supply Expansion Program and tax deferral designations are in place to provide farmers with assistance this year.

Production Insurance (Crop Insurance)
The objective of the Production Insurance program is to ensure that producers in the agriculture and agri-food industry across Canada have access to affordable insurance program, by funding a portion of producers' premiums and provincial administrative expenses and by offering reinsurance. Participation in crop insurance programs is a farmer's best option for managing the risks associated with crop production, including disease, pests, and weather. Production Insurance is a federal-provincial-produce cost-shared program that stabilizes a producer's income by minimizing the economic effects of production losses caused by natural hazards. Production Insurance is a provincially delivered program to which the federal government contributes a portion of total premiums and administrative costs. The federal government also provides a reinsurance arrangement (deficit financing) to provinces. Currently, five provinces ( Alberta , Saskatchewan , Manitoba , New Brunswick and Nova Scotia ) participate in this arrangement.

Significant improvements have been made to the crop insurance/production insurance program over the last number of years. Today, farmers are insuring more crops and more acres and they are purchasing higher levels of protection than ever before. While the number of insured producers (103,000) has remained about the same over the last five years, the percentage of crop acres insured has increased by almost 26 per cent to about 56 million acres. The new production insurance program covers more commodities and provides a broader range of program choices for producers. A ‘whole-farm’ option for production insurance offers a cost-effective alternative for highly diversified farmers.

For more information, producers should contact their provincial crop insurance agency:

• British Columbia
• Alberta
• Saskatchewan
• Manitoba
• Ontario
• Québec
• New Brunswick
• Nova Scotia
• Prince Edward Island
• Newfoundland and Labrador

Canadian Agricultural Income Stabilization
CAIS replaces the Net Income Stabilization Account (NISA) and the Canadian Farm Income Program (CFIP). CAIS provides both income stabilization and disaster assistance with a more streamlined application process for farmers.

The basic premise of the program is the deeper a producer’s loss, the greater the government share of the cost to cover those losses.

CAIS will provide affordable protection for margin declines, without the need for an account build-up. This means beginning farmers can access stabilization and disaster coverage at the start of their careers, and the program is also effective in back-to-back disasters.

To secure protection, the producer would make a fully refundable deposit, meaning that the producer never loses it. The refundable deposit is not a premium - the producer uses it to help replace lost income and if there is no margin decline, it will be rolled over to secure protection the next year. If a producer chose a different level of coverage the following year, he or she could simply adjust the refundable deposit already on account.

To make CAIS even more affordable, governments have included an option that would allow producers to secure their desired risk protection level by depositing only one-third of their required cost-share. This option would be available during the first two years of participation in CAIS and in the two years immediately following a serious margin decline. And remember, this deposit is refunded to the producer when a payment is made.

Using a new ‘production margin’ calculation, the new program will be more responsive to the production risks posed by rising input costs. And because the margin will be larger, producers will get more support in a significant downturn.

Advance Payments Program (APP):
The Advance Payments Program (APP) allows farmers to receive cash advances of up to $250,000 for crops in storage. Advances on the first $50,000 are interest free. The program is open to farmers of field crops that are storable in their natural state, as well as producers of maple syrup, honey and ranch-raised fur. The program is accessible through producer organizations which administer the program through an agreement with the federal government.

For more information, contact the program manager toll free at 1-888-346-2511 or the website at www.agr.gc.ca/nmp/app/

National Water Supply Expansion Program:
The objective of the National Water Supply Expansion Program is to provide assistance to the agricultural community across Canada to help reduce the risk of future water shortages, and to meet the everyday growing needs of a vibrant Canadian agricultural sector, through the planning and development of secure, healthy and reliable water resources.

The National Water Supply Expansion Program (NWSEP) is a four-year, $60-million initiative under the APF. The NWSEP supports the Environment element of the APF through the development, enhancement and protection of vital water resources to help address water constraints in agricultural areas of Canada.

A national program, the NWSEP will focus on assisting Canadian producers to develop and enhance long-term agricultural water supplies. The following information provides a brief outline of eligible applicants, the three tiers of eligible projects with examples of each, program assistance and partner responsibilities, and application deadlines and procedures. Please click on the province-specific information presented below for more detailed information on the NWSEP in your province.

Tax Deferral Program: (Prescribed Drought Region)
Under this program, owners of breeding livestock in designated areas who are forced to sell all or part of their breeding herd due to drought conditions, are eligible for a one-year tax deferral on income from those sales.

The deferral allows eligible farmers to defer income tax on the sale of breeding livestock for one year to replenish breeding stock in the following year. In the case of consecutive years of drought designation, producers may defer sales income to the first year in which the area is no longer designated. Eligible farmers will be able to request this deferral when filing their income tax returns.

• List of all designated areas eligible for 2005
• List of all designated areas eligible for 2004

For more information, contact a local Canada Revenue Agency (CRA) office.