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.
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.
Your selected coverage level (of either 90% or 100%) represents a proportion of the 40% provincial contribution to RMP. Some commodities are only eligible for 100% coverage.
Support levels are based on the target price for a crop, multiplied by your chosen coverage level (90 or 100 %) for that crop. When the market price falls below your support level for a crop, you receive a payment.
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 2015 acreage
Payments for RMP Grains and Oilseeds are based on the difference between the support levels and average market prices.
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
The Payment schedule below shows the payments and adjustments you may be eligible to receive.
Given the newly imposed $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.
You may select 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 2014 the proration factor was approximately 30%.
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.