CAIS Thoughts

[TOM4CWB]

Carebear300;

Isn't that the new economy?

Just like selling Carbon Credits, $8/ac. for the farmer/owner of the land; $20/ac for lawyers, accountants, tax specialists, brokers and consultants!

In general on CAIS/FIDP I know having good records on performance does help future decisions... to know what is sound profit management, and what is not. The CAIS system can help with these numbers directly... it shows many interesting facts about the risks we take!

[cowman]

Well TOM it works for you because you are a modern up to date kind of guy! Me and Carebear are just old farm boys trying to muddle through! Which is okay...if we didn't have the government, and the lawyers and the accountants to complain about we might have to complain about the weather or something! LOL

[TOM4CWB]

Cowman;

I am a fire fighter... just like you and Carebear300 ... far too few farmers stick with the books and run the numbers... COmputer or in a book is not at all the issue.

Knowing costs, long term trends, where we have been... are very important issues to teach our younger managers who must fill our boots in future years.

CAIS is a good tool to encourage this type of discipline... and can help in a number of risk management analisis senerios.

It is hard work... no doubt.

But the rewards are more than worth the trouble... it is our responsibility to our families and communities to know what is up, and where we are headed.

Now, we need 2004 CAIS details to make good risk management decisions... to make the right choices...

Crop Insurance;
Hedges;
Rainfall insurance;
Management decisions on capital equipment for risk management of weather risk;

... these all are directly related to CAIS.

[Yusishen]

I knew I'd get some people talking about CAIS in this forum :-)

Anyway, we haven't applied for a 2003 advance and probably won't qualify for 2003 payment as I expect our 2003 margin to be above our reference margin (we are grain farmers in Eastern Manitoba if that makes a difference). I therefore don't really need my 2003 Options notice as I can just begin with 2004 but it still makes me wonder when I don't have it yet. I've been told the delay is because we incorporated effective the 1999 year and they need to combine the pre-incorporation NISA information to get the 1998 figures. We applied for AIDA and CFIP (got some money out of the second) and they managed to combine the info so I'm at a loss as to why it takes CAIS so long.

Other friends who just began farming in Canada in 99 and who have scaled up acreage over the past 5 years are still waiting for both of their options notices (non-incorporated). The last they heard was "they were mailed today".

I'm curious as to the one person who said their accountant charged them to fill out CAIS forms. The final supplementary forms aren't out yet so what were you charged for? An advance application? If not, make sure you don't get another bill when the proper forms come in and the accountant finds out what information he really needs.

Does anyone have opinions on whether you should go 70%, 92% or somewhere in the middle? Our NISA account pretty much covers the deposit (based on the 2004 notice) even at the 92% level so cash isn't the deciding factor.

I was at the road show too and as far as I could tell, they didn't know anything about a crop insurance linkage yet (this would be in Manitoba anyway, Alberta might be different).

[carebear300]

Once again I stuck big foot in mouth. I was charged the extra five hundred and some dollars to collect all relevant information when the accountant is able to fill in the form it will be filled in. Just wanted to clarify that. As for the crop insurance not affecting your payout like they said at the meeting I attended it was news to my accountant. Sure wish somebody would get these things finalized so we would all know where we were at.

[k-way]

Supplementary forms are available on the AFSC site (for over a month):

http://www.afsc.ca/Disaster Programs/CAIS Program/CAIS Application Forms.htm

We applied for the 2003 advance, were told we qualified, and then were told that we had to do income tax and supplementary forms to "verify" their estimates that were based on FIDP. Apparently we must have been lying all this time, just because we weren't in NISA! So no money/advance until we do everything the long way around anyway.

As for what margin to pick, we were told by CAIS a month ago to max out your protection limit, at least for the first couple of years until the fallout from BSE levels out. But a neighbour just got told by them the other day that about 85% is your best bet because it will protect you from getting nothing down the road, which will happen at full protection level. The neighbour was also told that they will not be able to change their protection level in future years (up or down). So how is that supposed to work, when the more protection you pay for the less you will get? And you can't change from year to year?

I just wish they would all get thier stories straight or not tell us anything at all. How can you make management decisions with information like that?

The person to talk to at CAIS is Vickie Chapman. She's supposed to be the top person with all the answers. Not that even talking to her seems to help right now.

[fjopp]

I am a fire fighter to my question is why are supply managment farms are not having the same level of insurance is the goverment not supporting supply managment? I think my industy just has a lower risked.

[Yusishen]

The forms at AFSC are for Alberta only, I assume. To clarify, CAIS in Manitoba is run by the federal government and they don't have their forms yet. Just another example of the confusion this supposedly national system is causing.

I was told you can change your protection level from year to year (at the CAIS meeting). I don't know if that's another area that depends on where you live or not.

[skywalker]

Just a little info on what our accountant told us as far as protection level. he said if we were joining cais to go for 92% level or nothing ,cause at this level we get the most gov't money and any time you can get the most from the gov't ,go for it

Jerry

[frustrated1]

CAIS meetings.

From my understanding you can change your % coverage from one year to the next. The crop insurance link looks like a positive thing. The bean counters will collect your numbers then run scenarios with and without crop insurance. If the powers that be determine you've harmed yourself with participating in crop ins, you'll get back your premium. Or up to that maximum. Not sure what happens if you screwed yourself beyond that? Also, IF they allow negative margins, they assume you've got crop ins and if you don't they will deem that you did have at the 70% level and deduct that(in the negative portion). So my take is they are making crop ins look attractive, especially for spot coverage. ie, hail on one quarter where your CAIS may not have paid out. One thing i was happy with is they may have plugged a loophole regarding expansion. I may be mistaken on this one but i understood that an acre may not necessarily be an acre anymore. Expansions will be given additional reference margins equivalent to area average so if you triple your acres your ref margin may not "just triple". Keeps guys from renting a bunch of sand just to farm the program.