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Communication to potato, cereal, grain corn and oilseed producers

A communication was sent to inform clients concerned about changes that will apply to the insurance and income protection programs regarding the eligibility of grain corn, soybean and potato products.

Since the disruption at Canada Post may cause delays in mail delivery, here is a copy of the content of the letter that will be mailed.

Content of the letter

On June 29, the Board of Directors of La Financière agricole du Québec (FADQ) adopted the following amendments concerning grain corn, soybeans and potatoes:

  • Eligibility of these products to the Agri-Québec program retroactive to the 2014 participation year;
  • Eligibility of these products to the Agri-Québec Plus program starting in the 2016 participation year;
  • Withdrawal of the eligibility of these products to the Farm Income Stabilization Insurance (ASRA) program starting in the 2016 participation year.

Background

FADQ’s Board of Directors saw the results of the consultations made by the apple, grain (corn and soybeans) and potato producers’ federations with ASRA program participants.

Since grain corn, soybean and potato producers clearly expressed their wishes through a majority vote, the Board of Directors agreed to respect their choice and make the proposed amendments.

Agri-Québec participants concerned by the changes will therefore benefit from amounts estimated at $68 million under calculations retroactive to the 2014 and 2015 years.

For their part, apple producers chose to conserve their eligibility to the ASRA program.

Details on how the programs are applied

  • AGRI-QUÉBEC: SPECIFIC TERMS TO CALCULATE ADJUSTED NET SALES (ANS)
    The calculation of ANS for Agri-Québec participation purposes subtracts the amount related to seed purchases from the sales amount. In the financial information statements received for the AGRI programs, for the 2014 and 2015 years, the amounts for seed purchases of grain corn, soybeans and potatoes are not itemized. To rectify this situation, FADQ will apply an average percentage on the sales amount of these products, to take into account the seed purchases and establish the ANS.
  • ASRA: CLOSURE OF THE 2016 INSURANCE YEAR FOR THE PRODUCTS CONCERNED
    Coverage for grain corn, soybean and potato productions is no longer offered starting in 2016. As a result, files of clients who renewed their coverage or those newly registered will be closed or adjusted to take into account insurable categories. Contributions already made will be reimbursed following this operation.
  • ASRA: INSURABLE MINIMUM FOR CEREAL AND CANOLA COVERAGE STARTING IN THE 2016 YEAR
    The eligibility condition to cultivate at least 15 hectares per category or a combination of these categories every insurance year remains in place. Grain corn and soybean areas will continue to be counted to determine the minimum.
  • ASRA: INSURANCE FUND SURPLUS
    The ASRA fund is showing a surplus for the products of grain corn, soybeans and potatoes (grain corn $45 million, soybeans $12 million and potatoes $1 million). The disposition of the surpluses from the ASRA fund will be subject to discussions, with the Union des producteurs agricoles acting as the representative for participants.

In a snapshot

  • Grain corn, soybean and potato productions are eligible for government contributions under the Agri-Québec program, retroactive to the 2014 year, and for coverage offered by Agri-Québec Plus starting in 2016.  
  • These productions will no longer be eligible for ASRA coverage starting in the 2016 insurance year.
  • Transmission of financial information and processing for AGRI programs:
    • 2014 participation year: No procedure to follow, a deposit notice will be issued for the participants concerned;
    • 2015 participation year : Financial information already sent: No procedure to follow, a deposit notice will be issued for the participants concerned;
    • 2015 participation year: Financial information not already sent: Seed purchases for grain corn, soybeans and potatoes must be reported under the code for seeds and plants covered by ASRA since they remain covered by ASRA for the 2015 insurance year.
    • The processing of files and issuing of the first deposit notices related to these changes are scheduled for September 2016.
  • For the 2015 participation year, the deadline for enroling in the Agri-Québec program and transmitting financial information is December 31, 2016.

For more details on the terms for applying the Agri-Québec and Agri-Québec Plus programs, please see the program summaries or contact an insurance advisor at your FADQ service centre at 1 800 749-3646.