Released on March 10, 1999
Agriculture and Agri-Food Minister Lyle Vanclief and Saskatchewan
Agriculture and Food Minister Eric Upshall today announced a one-time
enhancement of $85 million to the Net Income Stabilization Account
(NISA) program for Saskatchewan farmers.
"This enhancement will further protect the incomes of Saskatchewan's
farmers and will help to ensure that family farm operations remain
strong and viable as we approach the next millennium," said Mr.
Vanclief. "Farmers will not be required to provide matching funds
which will allow them to keep more of their money working, while
offering greater future economic security."
"These NISA enhancements will help more than 55,000 Saskatchewan
farmers who have NISA accounts by giving them one more tool to use to
address the specific circumstances on their own farms," Upshall said.
NISA participants will receive an average payment of $1,540 in their
account, which they can access by using the NISA triggers.
This NISA enhancement is in addition to the recently announced
federal-provincial Agricultural Income Disaster Assistance Program.
After NISA processes applications on 1998 eligible net sales, the
funds will be automatically put into NISA accounts. The actual
deposit will be calculated as two per cent of the higher of their
1998 eligible net sales or their average eligible net sales for
1994 to 1998. Where a farmer has less than five years of
eligible net sales, the average will be calculated for those
years only. The initial calculation will be done on the 1998
eligible net sales, with a later (end of 1999) additional top-up
if the average eligible net sales is higher.
Any producer who opted out of NISA in 1998 or previous years can
obtain the enhancement by rejoining NISA by the 2000
stabilization year and get a two per cent enhancement on their
eligible net sales when they rejoin.
The ministers also said that the federal government and the
provinces are working together to improve the NISA triggers for
the 1999 stabilization year (starting January 1, 2000). The
changes under consideration include increasing the minimum income
trigger and having the stabilization trigger reflect changes in
farm size.
The NISA enhancement announced today is a one-time-only program
that is funded out of the existing safety net agreement between
the federal and Saskatchewan governments. The federal government
is contributing $75 million (subject to federal Treasury Board
approval) and Saskatchewan $10 million.
NISA was established in 1991 and is a federal-provincial program
designed to help farmers stabilize their income.
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For more information, media may contact:
Sylvie Millette LeDuc Tom Richardson
Press Secretary Agriculture and Agri-Food Canada
Minister Vanclief's Office Ottawa
Ottawa (613) 759-7266
(613) 759-1761
Hal Cushon
Saskatchewan Agriculture and Food
Regina
(306) 787-5961
NISA ENHANCEMENT BACKGROUNDER
Description of NISA
Net Income Stabilization Account (NISA) is an individual stabilization account to which participants and governments contribute and from which payments are triggered by a farm income trigger and a minimum income trigger.
Participants contribute up to three per cent of eligible net sales (ENS) which is matched by governments (2/3 federal 1/3 provincial). Farmers can also make unmatched deposits of up to 20 per cent of ENS each year.
Participant funds on deposit receive a three per cent interest bonus.
Impact of Enhancement
The average farmer with $77,000 of ENS will receive a one time contribution of $1,540 in the NISA account.
A farmer at the $250,000 maximum would receive a one-time contribution of $5000.
Safety Net Framework Agreement
The federal-provincial safety net framework agreement outlines the framework for national safety net programs and how the federal $600 million is allocated annually.
Under the agreement, provinces are required to contribute $400 million.
Provinces operate crop insurance, NISA and a number of companion programs under the framework agreement.
The funds being used to fund the NISA enhancement are funds available under this agreement. Other provinces have used their funds under this agreement in other ways.
Saskatchewan and Canada have chosen the NISA enhancement as the appropriate way to use some of the federal allocation for Saskatchewan.
This NISA enhancement is a Canada-Saskatchewan companion program under the framework agreement.
