EFFECTS OF ENHANCING NISA ON INCOME STABILIZATION AND SUPPORT

Dynamic stochastic simulation is used to explore the effects of enhanc ing Canada's NISA program (a resource-neutral farm income support prog ram) by increasing the size of contributions matchable by the governme nt. The government matching contributions are a subsidy to farmers, pa rt of which is potentially available as disposable income and part of which must remain in the producer's stabilization account, becoming av ailable only on retirement (or upon exit from farming). It was found t hat progressive enhancements to the program: (a) yielded diminishing m arginal gains in year-to-year income stability for farmers; and (b) re sulted in a declining proportion bf the government contribution being available as disposable income.