| Saskatchewan Crop Insurance protects you against production losses while the Canadian Agricultural Income Stabilization Program (CAIS) protects you against farm income declines caused by low prices, rising input costs and other related factors. Crop Insurance payments are crop-specific where as CAIS payments are calculated on a whole-farm basis. As a result, an offset between the programs does not necessarily apply but the two programs are designed to work together to provide maximum protection for producers.
Crop Insurance payments are eligible income under CAIS, which will increase a producer’s reference margin in future years and preserve higher levels of support. There are also positive and negative margin linkages to protect producers from being financially disadvantaged by being in both CAIS and Crop Insurance if a production loss claim is triggered.
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Positive Margin Linkage |
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A positive margin refers to losses between 0 and 100 per cent of a producer’s reference margin. A Crop Insurance claim payment will trigger CAIS to calculate the benefit a producer would have received without insurance coverage compared to their benefit with insurance coverage. If a dual calculation indicates a producer would have been better off only relying on CAIS to cover the annual loss, the producer will receive a rebate on the difference up to the amount of their current year’s total Crop Insurance premium.
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Negative Margin Linkage |
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The CAIS program includes negative margin coverage up to 60 per cent for eligible CAIS participants. A negative margin occurs when a producer’s allowable expenses are greater than their allowable income. A producer’s CAIS benefit may be reduced for producers who do not participate in the multi-peril grain and forage programs under Crop Insurance or have not purchased a minimum of 70 per cent coverage on insurable commodities.
When the CAIS administration determines that a producer is eligible for negative margin coverage, Saskatchewan Crop Insurance will supply producers with a CAIS Deemed Production Insurance Benefit Worksheet outlining the potential losses that would have been covered under Crop Insurance.
For CAIS participants with no Crop Insurance history, the coverage, premiums, losses, and area averages are used in calculating potential loss. Participants who are also Crop Insurance contract holders with coverage, premiums, and losses will have the calculation based on their individual history. CAIS administration will determine how much of this amount will be applied to a producer’s CAIS negative margin payment calculation.
For general CAIS enquiries, call CAIS administration at 1-866-367-8506.
On March 31, 2008, CAIS may undergo changes due to the expiration of the current Agricultural Policy Framework agreement.
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