Productions covered

General principles

Compensation: Program intervention when the selling price is lower than the stabilized income.
Compensation = Stabilized income - Average selling price

The payment of compensation is limited to the maximum total of all products covered for each fiscal period. Should that amount be exceeded, a reduction in compensation will be applied to all the products.

Insurance year: January 1 to December 31.

Stabilized income: production cost including 90% of the wages of 0.947 operator-owner. Earnings on equity and the stabilization insurance contribution for the product concerned are not included in the stabilized income.

Production cost: that of a specialized farm type whose parameters and expenses are indexed annually.

Selling price: average price obtained in specialized auctions specializing in cow calves weighting between 136.1 kg (300 lb) and 499 kg (1,100 lb), regardless of non-standard and or off-types. La Financière agricole determines the average selling price using a statistical survey conducted among operations making sales through specialized auctions.

Link between ASRA and AgriStability, AgriInvest and Agri-Québ

• Compensation payments made in the framework of the Farm Income Stabilization Insurance (ASRA) Program take into account payments granted under the AgriStability, AgriInvest and Agri-Québec programs or under any government risk management program involving farm income;
• To continue to benefit from full coverage, ASRA participants must participate in AgriStability. ASRA compensation payments for those who do not participate in AgriStability are reduced by 40%.

Model farm

Farm with 125 beef cows and 239.6 hectares of crops.

The annual marketed production volume is 31,447 kg in 2010.

The average weight of calves at sale is 307.4 kg (678 lb).

Eligibility

• Be domiciled in Québec.
• Be the owner of the animals that were raised in Québec.
• Marketed calves must have been born in Québec and be the offspring of the female breeders owned by the participant at the time of calving.
• Minimum of 2,092 kilograms of calves sold on a live basis annually.
• The insurable minimum must be respected on an annual basis even if the producer joins the program or terminates participation during the insurance year.
• Insure all insurable calves that the participant owns.
  
• Participate in the Program for the product Cow Calves for a period of five years.
• No enrolment deadline. However, the date that marks the beginning of the enrolment period corresponds to the registration date to the program, determined by the date on which the application form is received.

Cross compliance measures

When the Ministère du Développement durable, de l'Environnement et des Parcs (MDDEP) transmits information to La Financière agricole establishing that the participant did not submit a valid phosphorus report as stipulated under the Agricultural Operations Regulation (AOR), the participant loses the right to any compensation for the current insurance year for all the insured products. Moreover, the participant will be required to pay, as an administrative fee, an amount equal to the contribution that would have been due on all the insured products.

The provisions related to the phosphorus report concern all the raising or spreading sites owned, leased or on which the operation custom produces. It targets all the operation’s productions, whether or not they are covered by a program at La Financière agricole.

For more information on the requirements related to the phosphorus report, participants should consult an agrologist or the regional office of the MDDEP.

Conditions for participation

The participant must identify his animals with cattle production ear tags recognized by virtue of the Regulation respecting the identification and traceability of certain animals. The participant must at no time take a tag off an animal already identified.

The participant must provide Agri-Traçabilité Québec (ATQ) with the required traceability information for all of the insured animals and for the entire breeding herd at the moment of their birth, purchase or death.

Exit declaration

The participant must report to the ATQ, after the sale of an animal to a buyer not recognized as an actual weight source by Financière agricole, the tag number of each animal identified, the sex, exit  date, site number where the animal is from and, when the information is known, the contact information of the operation that will continue raising the animal and the destination site number.

Evaluation procedures for insurable volume

Insurable Animals

La Financière agricole determines the insurable volume based on the number of kilograms of calves sold and the number of calves sold whose eligible kilograms sold stem from:

• The actual weight available on a live weight basis;
• When the actual weight is not available, the estimated weight calculated on the basis of 0.9 kg a day starting on the animal’s date of birth multiplied by the calf’s age at the time of the sale, to which is added 42 kg to take into account the birth weight. The estimated weight cannot exceed 204.1 kg (450 lb).

Any kilograms of calves associated with an animal born on the participant’s farm that was sold and bought back for breeding purposes by the participant, or purchased by an operation that has ties with that participant, are not eligible.

When calculating compensation advances, the insurable volume (production estimate) of kilograms of calves sold is established by using the births reported to the ATQ and the actual sales of the year in question.

The allowable weight for a calf that is sold may not exceed 340.2 kg (750 lb) and only calves whose sales weight is at least 204.1 kg (450 lb) are included.

Animals slaughtered for contract in a transitory or local slaughterhouse and those marketed on a live basis directly to consumers are not insurable.

Only the information relating to the actual weight obtained from a source recognized by La Financière agricole and agreed upon by the ATQ is considered to determine insurable volume; otherwise, the weight is estimated according to the parameters of the Program.

A calf may be considered only once and associated with a single participant.

An animal may not be considered both on the basis of kilograms of calves sold and as a female breeder in inventory for a same participant.

Inventory

The insurable volume is determined after the permanent identification information has been gathered in the participant’s file at ATQ.

La Financière agricole may, at any time, conduct a verification of the insurable volume. All the information gathered during such a verification will be used over any other information received by ATQ.

Where La Financière agricole notices a difference between the insurable volume established from information from the ATQ and that established following a verification, the insurance covers the volume established as a result of the verification. The participant must pay, as an administrative fee, an amount equal to the share of the contribution due on the defaults observed.

In the event that the total insurable volumes of all participants for the insurance year in question exceeds the collective insurable limit of 234,000 female breeders in inventory, established on the basis of the data held by the ATQ, the unit compensation and the year’s unit contribution will be established by applying a ratio resulting from the division of the collective insurable limit by the total number of female breeders of all participants for the year in question.

For this purpose, female breeders are females of at least 22 months of age and that must have been owned by the farming operation for at least six (6) months prior to being subject to a transaction. Only the period during which the female breeders are kept in Québec will be taken into account.

Moreover, an animal cannot be considered both on the basis of kilograms of calves sold and as a female breeder in inventory for a same client.

General

Financing of the Premium

One third of the premium comes from the participants and two thirds of the premium comes from La Financière agricole.

For participants whose insurable volume exceeds 282 calves or 95,935 kg of calves sold, 50% of the premium comes from participants and 50% from La Financière agricole for the volumes exceeding those thresholds. However, the share of the premium associated to the accumulated deficit, as of March 31, 2010, will continue to be financed based on a 1/3 - 2/3 ratio.

Any new participant affiliated with an operation that, as of November 11, 2009, had an insurable volume exceeding 351 female breeders or 95,935 kg of calves is subject to the terms described in the above paragraph, but on all the insured units for the product Cow Calves.

Participant Contribution

The share of the premium coming from participants, or the required contribution, is deducted from the first compensation advance for the year. If need be, any remaining contribution is deducted from a later payment or recovered, at the latest, prior to the final payment for the insurance year in question. For a new participant, however, half the contribution is due upon enrolment.

Breakdown of Compensation

Starting in the 2012 insurance year, the compensation calculated for a farm type will be broken down as follows:

• Three quarters of the compensation on the number of eligible kilograms of calves sold.
• One quarter of the compensation on the number of calves sold from which those eligible kilograms sold stem.
  

Reduction in Contribution

Any farm operator qualifying a participant for an establishment grant under the Financial Support Program for Aspiring Farmers at La Financière agricole du Québec, makes it possible for the participant to benefit from a 25% reduction in his or her contributions, up to $50,000 annually for all insured product. The reduction applies for two consecutive years.

To be entitled to the reduction, the participant must remain eligible for the establishment grant for the full period of the insurance year in question.

From the time the establishment grant is confirmed, the participant has two years in which to apply for the reduction in contribution.

Administrative Fee

Annual administrative fees of $55, per category or insured product are charged. These fees may be indexed annually.

Compensation

The final compensation is paid at the latest by the April 30 following the end of the insurance year.

It is possible for La Financière agricole to pay compensation advances throughout the year.

Entitlement to compensation is conditional on the payment by the participant of any contribution due according to the Plan conjoint des producteurs de bovins du Québec. La Financière agricole may deduct, from compensation payments it makes, the contributions due by participants to their joint plan.

Application for review

Any request for a review of a final decision rendered regarding a participant’s insurance file must be made in writing, explaining the motives behind the request, and sent to the Service Centre in charge of the participant’s file or delivered in person to a representative of La Financière agricole within ninety (90) days from the date of the decision in question. However, program conditions and parameters or program premises, the results of collective appraisals for crop insurance losses and exclusion from programs for motives provided for in the programs may not be subject to a request for a review.

This summary, in effect for the 2012 insurance year, in no way takes precedence over the provisions of the Program, of the regulation in effect or of any policy of La Financière agricole.