A provincially appointed task force is recommending sweeping changes to programs to help farmers mitigate crop losses due to climate change — including exploring whole-farm revenue insurance.
The Agriculture Risk Management Review Task Force released 25 recommendations last week in a 108-page report prepared for Agriculture Minister Ron Kostyshyn.
Climate change can’t be ignored, the report warns. The 2011 flood alone cost the province $1.2 billion. Since 2008, Manitoba farmers received $3 billion through farm support programs — much of it due to weather-related crop loss.
Without changes, AgriStability and AgriInvest are at risk.
“(I)t’s possible these programs could be forced to scale back the assistance they offer, which could have serious long-term effects on agricultural production in this country,” the report says.
Even though it seems counterintuitive, the report notes that several models predict crop insurance payouts will not rise due to climate change. But that is due in part to the potential for average yields to be lower, thereby reducing exposure.
“While it is generally good news to know that programs such as AgriInsurance are expected to be largely unaffected by climate change, that does not mean we should miss the opportunity to make improvements to them,” the report says.
However, the task force is worried about Excess Moisture Insurance (EMI). It says the federal and provincial governments need to “recognize the importance of Manitoba’s Excess Moisture Insurance and commit to it for the long term.”
EMI, a part of AgriInsurance, triggers payouts when fields are too wet to seed in the spring.
The task force also recommends exploring the development of a “whole-farm” revenue insurance program, which the Manitoba Canola Growers Association (MCGA) suggested could be an alternative to AgriStability.
AgriInvest should also be modified to encourage farmers to use the program to prepare their operations for climate change.
Bill Uruski, a Fisher Branch farmer and agriculture minister in the 1980s, chaired the task force.
“It’s too early for me to get into any fine details, but definitely we’re going to take this forward and condense it and continue to have communications with farm organizations and producers,” Agriculture Minister Ron Kostyshyn, who commissioned the report, said in an interview Jan. 8.
Farmers can share their views with Kostyshyn at a meeting in Brandon at 4 p.m. Jan. 18 at the Keystone Centre’s upper curling lounge.
“The task force did a really good job I think, capturing every- body’s input, including KAP’s,” Keystone Agricultural Producers’ (KAP) president Dan Mazier said in an interview.
KAP is pleased the task force recommends continuing Environmental Farm Plans to encourage farmers’ best practices, that a new permanent cover program be considered to encourage taking marginal land out of production and that Class 4 wetlands be removed from municipal taxes through federal-provincial cost sharing, Mazier said.
The report also suggests investigating ALUS (Alternate Land Use Services) as a way to save wet- lands. KAP helped create ALUS in the early 2000s.
Farmers following best management practices is the first line of defence, the report says.
“Most (recommendations) are based on a philosophy to incentivize beneficial behaviour, as we believe a carrot works better than a stick.
“The task force is recommending the provincial and federal governments take concerted action today in order to prepare for the expected effects of climate change, specifically extended periods of excess moisture and flooding, as well as the risk of extended periods of drought.”
Too much moisture has been a major problem for Manitoba farmers for years, especially in certain areas. Parts of the Interlake were wet for 10 consecutive years (2004-14) with more than 25 per cent of the land going unseeded, the report says. The Parkland and southwest have also suffered.
After 15 years, EMI has a $236-million deficit. Premiums need to go up, but that could cause low-risk farmers to pull out. EMI, the report says, “is not viable without universal participation.”
When EMI started in 2000, $3 million in premiums were collected — $444,000 from farmers. In 2015, premiums totalled $25 million, including $12 million from farmers. Total premiums increased eightfold over that 15-year period, while farmers’ contribution jumped twenty-seven-fold.
KAP also wants EMI to be viable. Farmers’ coverage is reduced each year they have a claim. Mazier said it’s unfair because farmers can’t control the weather. He believes low-risk farmers would be willing to pay a bit more so farmers in wetter areas are protected.
The Manitoba Agricultural Services Corporation, which administers EMI, told the task force that “in some cases, losses are more related to management than to climate.”
“This speaks to the need to tie program participation and premium rates to producers’ farm management practices,” the report says. “Producers also need to understand that EMI is insurance as opposed to compensation.”
Whole-farm revenue insurance, which the report says should be investigated, exists in the United States, insuring farm- er’s revenue against losses due to poor production and/or poor prices.
It’s similar in some ways to the Gross Revenue Insurance Program (GRIP), which ran in Manitoba from 1991 to 1995. GRIP allowed farmers to insure their gross crop revenue from each acre of production against low yields and prices. However, GRIP coverage was crop specific similar to current crop insurance programs. Under the whole-farm concept total farm revenue would be insured rather than each crop. While that approach would reduce the risk of payouts, less risk means lower premiums.
GRIP was popular with farmers, but critics believed the guaranteed revenue for certain crops sometimes distorted farmers’ planting decisions. They also accused some farmers planning to exit the business of cutting inputs, saving them on expenses and triggering larger payouts.
Some also believed GRIP contravened trade rules, but its demise had more to do with federal budget cuts.
GRIP paid $779 million to Manitoba farmers and ended with a $63-million surplus — $21.1 million of it in farmer premiums.
The key to mitigating the impact of climate change on farmers is co-operation, Uruski said in an interview.
“Right from the individual farmer to government in terms of extension and programming and the co-operation of both federal and provincial governments,” he said.
Manitoba will have to negotiate changes to federal-provincial farm programs, which give the province more flexibility to offer different programs, Uruski said.
“The cookie-cutter approach doesn’t always work,” he said.
“That kind of co-operation re- ally needs to occur and it needs to occur systematically and as quickly as possible to get a good handle on this.”