Saskfarmer3 ?

[mbratrud]

Cut and pasted from Info about changes on their Website.

Limited Reference Margins

For 2013, producers' reference margins (support level under the program) will be limited to the lower of their historical reference margin or allowable expenses reported in previous years.

________________

For most producers this would mean 70% of their expenses, because if your allowable expenses are higher than your reference Margin on a long term average, you are not likely farming.

[cottonpicken]

Thanks for all the good info.

Am i right in saying that if crop insurance coverage
continues to climb like it has payouts will be not
happen?(pretty dumb question)

[Hopperbin]

mbratrud limitting your payment to no more than your allowable expenses I do not think really changes anything. Is it even possible to get a payment equal to your elligable expenses. That would be one honkin huge payment.

[Hopperbin]

Sask99 I disagree with you yet I never worked it out on paper. Need a brain like Charliep's to do that. But how i look at it Crop ins and Hail ins are basically ins and no money is really made on them programs above your premium over the year I would take my statement here as correct. So if the premiums reduce your ref margin and payouts from the ins increase your ref margin your ref margin will be about equal if you had the other insurance or not. But no one is figuring in that your payments from crop and hail are directly deducted from you agristability payment costing you sometimes the entire payment from the other ins. OK sometimes deducted not always. Now why not let a farmer like me collect from agristabilty occationally, cause i do save the gov't money in the end cause I am not contributing to the gov'ts indebtedness to crop ins every year. Having a choice creates efficiencies I hope everyone can understand that. Some can choose crap ins or some can choose agristability.

[mbratrud]

That's my point CP. If you are required to be in crop insurance for full benefit of Agristabilty for a Grain Farmer anyway. Why would you pay an Agristabilty premium when you have virtually no hope of collecting. That is what they (government) are hoping to achieve I suppose.

So Hopperbin. If your average allowable expenses on your Farm are $100 say, and you are required to be in crop insurance, can you imagine your average farm allowable Revenue to be under $70 per acre? and then any dollar under that you get 70% of. Even in a Disaster you can actually imagine getting a good payout??? What am i missing here?

[Hopperbin]

Cotton why do you ask completely stupid crazy questions on my topics LOL

[mbratrud]

Hopperbin, I think your misinterpreting limiting your payments to 70% of expenses to what they actually mean is limiting your Reference Margin to 70% of you expenses.

[Hopperbin]

So Hopperbin. If your average allowable expenses on your Farm are $100 say, and you are required to be in crop insurance, can you imagine your average farm allowable Revenue to be under $70 per acre? and then any dollar under that you get 70% of. Even in a Disaster you can actually imagine getting a good payout??? What am i missing here?

Its impossible for average revenue to be under the expenses you would have been ****ed years ago

[Hopperbin]

mbratrud ok got it, thinking

[mbratrud]

Hopper I knew you would . Believe me
I would have never imagined the absolute
gutting of the program that this change
is. They may as well just said we are
going to a strictly crop insurance
program, instead of playing games and
trying to slide this by farmers hoping
they won't notice because they are busy
with Harvest.

[cottonpicken]

Sask99,i remember you being on top of this shit,any
opinion?

[cottonpicken]

I did get an email from my accountant on Friday with the changes that were announced this week.

I don't think the example is being described here is totally correct.

Remember reference margin is the amounts over your allowable expenses. So using M's example of a farm having $70 of revenue is not correct. The correct way would be revenue falling below $70 over allowable expenses which could happen. Grant it that most farms non allowable expenses and family draw runs between 80 to 150 per acre, a farm with this occurance would be a disaster and hence the program would payout.


If you have a low margin per acre these changes will benefit you. So for those that have many repeat crop failures, your margin potentially can maintain a better spread. (I'm just interpreting the email yet so its a wait and see)

If you are a high reference margin farmer (over 200-250 per acre), future benefits will be less. But then I guess they have the net worth to sustain themselves better.

Its still a matter of understanding the program, having good records and either calculating the claim year margin each year properly or have someone who knows what they are doing do it for you.

I am still amazed at people that claim the program came along and asked for money back. If you knew your correct benefit in the first place, there is never any issues. I have had 1 claim in Agristability and a couple from the former CAIS program. My accountant calculates the number I am to get or how far my margin is away from a payment each year. The amount stated is always bang on or within 5% which I feel is acceptable. Each year I also get my upcoming year's reference margin in a per acre format which helps me plan accordingly.

Its not rocket science, but many accountants just don't understand the program or have to tools to calculate any parts of it.

[cottonpicken]

Reading the email again I think I had it wrong. The reference margin is the lesser of the actual margin or the allowable expense calculation that will be defined in the future.

That means low margin farms don't have anything extra but to their enjoyment, high margin farms won't receive big payouts because of their success or "luck" as some may describe it.

The other change is 70% gov't sharing across the board instead of the 60 to as high as 80% as it was before.

[cottonpicken]

In answer to your question cotton on crop insurance and increasing coverage levels and a reply to Hopperbin:

Your statement is not true imo
First remember one thing. If you don't get the revenue from crop production, marketing, crop insurance etc, Agristability is only going to pay you 70% of the loss of income. In 2010, everyone was made when the $30 too wet pmt was issued as it would reduce Agristabilty benefits. This is true but you end up about $9 ahead as if the payment wouldn't have been made, you only would have received a portion of it or nothing at all if you didn't have a claim at all.

Because your coverage levels increase, potential payouts also increase, and since its included in your future reference margins it helps keep it higher

[Daylate]

YOU DO NOT NEED TO HAVE CROP INS. Where it
effects you is when you have a negative margin in a
claim year, your agstab will only cover you down to
$0.00. Then it is left to crop ins. to cover your
negative margin. It is designed for no program
overlap.
And as for allowable expenses, my understanding
and the way it was explained to me was dumbed
down to explain the basic process. If your allowable
expense worked out to $250/ac. as an example, the
only way they would use your allowable expense is
if you grossed over $500/ac.(at that point your ref
margin would exceed allowable expense) this all
sounds good as long as theres no hidden
percenting and dividing in the calculating of the
allowable expense cause thats something i never
asked about.
Please school me if anyone else has or gets any
info. We should all know the ins and outs so we
arent buying insurance we dont need.