In addition, the federal government invested $600 million in the 2002-03 fiscal year and plans to invest another $600 million in the 2003-04 fiscal year to help farmers with the transition to new programs.

Building on NISA...

Through consultations, producers have said they like many aspects of existing programs, but they agreed that improvements can be made to resolve gaps and overlaps in the support system.

With producers sending a clear message to build on the best of what is currently available, work is under way to make a new business risk management system with the Net Income Stabilization Account (NISA) program and crop insurance as its cornerstones.

Some of the proposed changes to NISA include:

• integrated income disaster protection - income disaster assistance would be included as a permanent feature of the new NISA program. Support for farmers who suffered severe income loss has been provided through ad hoc and shorter-term programs such as the Canadian Farm Income Program (CFIP).

• simpler to use - when fully implemented, the program would provide for a single payment for both small or large drops in income. At present, farmers must apply separately to cover severe income declines versus smaller fluctuations. Under the new system, farmers would be required to submit only one application.

• matching funds as they are used - farmers' contributions to NISA would be matched on withdrawal by government money, ensuring public funds stay in the agriculture sector for the benefit of the industry.

• more options to support long-term profitability - an investment component would be introduced in 2006, and would be available to farmers who first have sufficient funds on account to provide protection against disasters. This feature would provide additional options to farmers who wish to invest in their business to improve profitability.

• more flexibility - the new program would provide flexibility for a farmer's individual situation, in that he or she could commit early in the year to a particular level of coverage.

In the change-over to the new NISA, producers will not lose any of the money currently in their accounts. They will have full access to these funds including the money from previous government contributions.

Building on crop insurance...

Changes being considered to crop insurance include:

• broader coverage - coverage for more commodities, potentially including livestock, through new and innovative insurance products.

• more options - a basket-of-crops option would be available along with current, crop-specific insurance products, providing a cost-effective alternative for highly diversified operations not well served by the existing crop-insurance system.

• equitable support for all - a  consistent level of federal support would be provided across commodities and across all provinces, and would help to reduce the chances of successful trade challenges against Canadian products.

Changes to both NISA and crop insurance would not begin to be seen by producers until later in 2003 or early 2004.

Producers will have time to become familiar with new program features. The new programs will not be delivered to farmers until later this year and in 2004. This is because calculations of benefits for program years like 2003, for example generally have to wait until the year is over so that all the necessary information can be collected. In 2003, farmers will provide the same data and use the same applications as in the past. The existing NISA and CFIP will pay out benefits for 2002.

Forms and guides for NISA are now available at Canada Customs and Revenue Agency offices, online at www.ccra.gc.ca, through the NISA administration, and on most tax preparation software packages.

Applications for CFIP can be obtained through the CFIP administration for producers who experienced an income disaster in the 2002 production year.