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Risk Management Program

Grain Farmers of Ontario wants the Provincial Government to deliver on their commitment to provide an additional $50 million to the RMP.

AgriStability is in Need of Crucial Reform

Risk Management Calculator

Updated with the pre-harvest prices, the RMP calculator is designed to help growers calculate the value of enrolling in the program. The calculator is based on both known figures (support prices, premiums) and producers own estimates of their expected harvest prices. Therefore, final results may differ.

2019 RMP Calculator

Risk Management Program (RMP) Overview

Ontario’s Risk Management Program (RMP) helps producers manage risks beyond their control, like fluctuating costs and market prices. The program is administered by Ontario’s farm business risk management agency, Agricorp. For more information about enrolling in RMP, program dates and other resources, please visit Agricorp’s RMP for Grains and Oilseed site.

RMP Cap

A cap of $100 million of government funding was applied to RMP in 2013. To ensure this funding cap is not exceeded, payments are prorated if estimated funds and industry need exceed $100 million.

Coverage Level

Your selected coverage level for 2019 is between 80% and 100%.  The Ontario provincial government portion of this is 35% and farmers pay 65%.

Support Price

Support levels are based on the target price for a crop, multiplied by your chosen coverage level (80, 90, 95 or 100 %) for that crop. When the market price falls below your support level for a crop, you receive a payment.

Premiums

Your premium rates are based on:

  • Target prices (industry’s average cost of producing a crop) and support levels
  • The level of coverage you choose

Your annual premium is calculated using this formula: premium rate x average farm yield (AFY) x 2019 acreage

Payments

Payments for RMP Grains and Oilseeds are based on the difference between the support levels and average market prices. Payments are calculated for pre-harvest and post-harvest periods.

Payments are made if a crop’s market prices fall below the annual support level. The support level is based on the industry average cost of producing a crop (target price), which is calculated annually by the Ontario Ministry of Agriculture and Food (OMAFRA).

Payments are based on:

  • The difference between market prices and support levels at the 40% provincial share
  • Available funding for the Risk Management Program

This rate is then multiplied by your acres and 50% of your AFY: payment = acres x (AFY x 50%) x payment rate. Because there is a pre-harvest and a post-harvest calculation, 50% of your AFY is used in each calculation..

Proration Factor

Given the $100 million cap on the Risk Management Program, payments may be subject to a proportional limitation of distribution. The proration factor is determined by dividing the amount of program funding available by the amount of production for which funding is needed.

The RMP Calculator allows you to choose different proration factors to see how your projected RMP payments may vary under different scenarios. A lower proration factor would normally be associated with a year in which a high number of producers are eligible for program payments. For example, in 2016 the proration factor was 40.6%, in 2017 – 56.8%, and in 2018 – 66.7%

Farmer’s Risk Management Premium Fund

All RMP premiums are collected by Agricorp and placed in the Farmer’s Risk Management Premium Fund (FRMPF), which is managed separately by each participating commodity group. The commodity groups use the funds to supplement payments in years of greater need. In years when the premium money is not required to top up payments, the money will remain in the premium fund. In any program year, the commodity groups can decide whether or not to make payments from the Farmer’s Risk Management Premium Fund. Payments are based on RMP payments for that program year.

For more information on the RMP, please visit the Agricorp Website.

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