OTTAWA - Farmers across Canada will see a boost in their Net Income Stabilization Accounts (NISA) now that distribution of $600 million in federal transition assistance has begun.
The $600 million is the first instalment of a $1.2 billion expenditure, announced by Prime Minister Jean Chrétien and Agriculture and Agri-Food Minister Lyle Vanclief June 20 as part of a $5.2-billion federal investment in agriculture. This assistance will be delivered over two years to help farmers deal with challenges such as drought and to help the transition to a new generation of more effective risk management programs under the Agricultural Policy Framework (APF).
The $600 million is in addition to existing Farm Financial Programs (Crop Insurance, NISA and the Canadian Farm Income Program) which are already in place for this year.
"Getting these funds as quickly and efficiently as possible has been our top priority," said Mr. Vanclief. "Everything is now in place and producers can now look for the funds to start appearing in their accounts."
Vanclief said while the funds will help producers throughout Canada, a significant portion will go to producers in Saskatchewan and Alberta where severe drought has taken its toll.
Payments to producers will be based on 4.25 per cent of their average eligible net sales over the past five years (1997-2001). Basing payments on eligible net sales will allow payments to be calculated quickly and fairly and will ensure the funds will begin flowing into producers’ accounts by Oct. 4. As well, the minister is seeking the concurrence of his provincial colleagues to allow those producers who opted out back in to the program.
Funds are also being set aside for new entrants to the program, ensuring those producers not currently enrolled in NISA also have an opportunity to receive this transition assistance.
To receive assistance, participants must hold a NISA account. Producers without an account can enrol in the program by filing a NISA application before Dec. 31, 2002 and opening an account at a participating financial institution where their NISA funds will be held.
Program participants will be notified through the Deposit/Withdrawal Options Notice (DWON) of their withdrawal entitlements. If producers are entitled to withdraw from the account the NISA Administration will respond within 30 days to the producer’s request for the funds.
Vanclief said, "The NISA program was designed by producers and industry as well as federal and provincial officials to ensure that all producers in Canada, regardless of farm size or commodity, are treated equally. Delivering the funds through the program allows us to meet a range of needs among a diverse farming population, and gives producers the flexibility to draw on the funds in a way that is right for them."
WHY THE $600-MILLION TRANSITION ASSISTANCE IS BEING DELIVERED THROUGH NISA
NISA is efficient and timely
*Providing funds through NISA, an existing national program available in all provinces, makes it administratively easy and cost-effective to deliver the funds. Producers who are eligible to trigger and who request a withdrawal from their NISA account will receive their money within 30 days.
NISA is national
*The $600 million is federal assistance for producers throughout Canada. The NISA program was designed by producers and industry as well as federal and provincial officials, with the specification of ensuring producers are treated equitably.
*By using NISA, we ensure all funds flow to producers under the same terms and conditions no matter where they operate, allowing us to comply with trade agreements and minimizing the potential for trade action.
NISA will assist the transition to new risk management programs
*NISA is a key component of the Business Risk Management approach that federal, provincial and territorial governments are developing within the Agricultural Policy Framework. Delivering these funds through NISA will help farmers get through a particularly difficult year, while also leading the way to new programming. Those producers not currently in NISA will be encouraged to adopt this important risk management tool.
* Funds have been set aside for those producers who do not currently participate in NISA. New entrants must file an application by December 31, 2002.
ENS allows funds to flow to those who need it
*Payments to producers’ accounts will be based on 4.25 per cent of their five year average of Eligible Net Sales (ENS). Basing payments on ENS allows us to calculate payments quickly and fairly and deliver the funds to farmers in a timely fashion.
*Funds will go to producers across Canada with a significant portion going to producers in Saskatchewan and Alberta where severe drought has taken its toll.
Most people will trigger and other options are available for those who don’t
*In order to trigger a withdrawal of funds, producers can use either the minimum income trigger which measures a decline in income, or the stabilization trigger which measures a decline in gross margin.
*The NISA program pays out funds after the close of the stabilization year. Those not triggering withdrawals either had a 2001 gross margin which exceeded their five-year average, or their income from all sources exceeded the minimum income threshold, which is $20,000 for individuals and $35,000 for a family.
*Options are available to those producers who are not triggering a withdrawal, including an interim withdrawal which can help them access funds now based on their 2002 income.
* Producers who do not currently participate in NISA, are encouraged to join the program in order to receive a portion of this year’s transition funding. Funds are being set aside to allow for new entrants to the program. New entrants must file an application by December 31, 2002.
* In the past three years, about 5,000 producers have voluntarily chosen to leave the NISA program. The Minister of Agriculture and Agri-Food, together with provincial ministers, is working on a proposal to provide special assistance for those producers who chose to leave NISA in 1999, 2000 or 2001 and are still farming in 2002. The proposed option put to the provinces, is that a special one-time provision be made which allows these producers to rejoin the program, without penalty, providing they are actively farming in 2002 and file an application by December 31, 2002.
* Quebec farmers participating in the NISA and Compte de stabilisation du revenu agricole (CSRA) programs will have their funds deposited directly into their accounts. Agriculture and Agri-Food Canada officials are working with provincial officials to provide an appropriate level of transition funding for non-NISA participants in the province of Quebec.
The program provides flexibility
* Providing funds through NISA gives producers more flexibility in managing their cash flow and tax implications. Funds in NISA are taxable once withdrawn. If the Government of Canada were to simply send a cheque to all farmers, the payments would be treated as farm income and therefore taxable this year.
Net Income Stabilization Account (NISA)
NISA Web site: www.agr.gc.ca/nisa
Farm Financial Programs Web site: www.agr.gc.ca/ffp
1 800 665-6472 (anglais)
1 800 665-2776 (français)
Site Web du CSRN : www.agr.gc.ca/csrn
Site Web des programmes financiers pour l’agriculture : www.agr.gc.ca/pfa