More crop insurance coverage for less in 2016

Grade guarantees will be introduced for feed wheats, 
including Faller, Prosper and Elgin ND

Manitoba farmers will get higher crop insurance coverage in 2016 and pay less for it, Agriculture Minister Ron Kostyshyn told Ag Days attendees Jan. 19.

Agriculture Minister Ron Kostyshyn announced changes to the 2016 crop insurance program at Ag Days Jan. 19, the last day before the election blackout, which limits government announcement.

Agriculture Minister Ron Kostyshyn announced changes to the 2016 crop insurance program at Ag Days Jan. 19, the last day before the election blackout, which limits government announcement.
photo: Alan Dawson

“Premium rates will decrease by an average of about 11 per cent compared to last year’s premium rates and this is due to the removal of the high 1989 (crop insurance) losses from 25 years ago…,” Kostyshyn said.

“When combined with the average increase in coverage this results in a four per cent average decline in premium per acre.”

Prices for insured crops are up five per cent on average. When combined with an average two per cent increase in probable yields, it results in a seven per cent increase in insurance coverage.

Other changes include a new grade guarantee for feed wheat, the option to insure higher-generation pedigreed seed and test plots, the addition of some vegetable crops, expansion of the Pasture Days Insurance Pilot Program and higher payouts for livestock destroyed by wildlife.

“We all know business risk management programs are an essential tool when we talk about agriculture,” Kostyshyn said. “We continue to improve upon it in a co-operative way with the federal government, provincial government and producers.”

Crop insurance premiums are based on a 25-year rolling average of loss experience, Craig Thomson, Manitoba Agricultural Services Corporation’s vice-president of insurance explained in an interview later.

“If we have a good year, like this year, it’s a positive loss experience,” he said.

“This year we dropped off a bad year (1989 when crops suffered because of drought) and picked up a good one and that makes for a positive impact on our premium rates.”

Over all, the dollar value of insured crops is up. Red spring wheat is flat, oats are down 12 per cent, barley is up 23 per cent, canola is up 14 per cent, soybeans are down three per cent and corn is up 27 per cent.

There will be a grade guarantee for some of the new higher-yielding American Dark Northern Springs wheats, as well as feed wheats in the Canada Western General Purpose (CWGP) class.

Grade guarantees

As of April 1 varieties designated as Canada Western Interim Wheat (CWIW) will have a grade guarantee of No. 2 CWIW. Currently, Faller, Prosper and Elgin ND are in this class. The Canadian Grain Commission (CGC) has announced Aug. 1 the CWIW class will end and be replaced with the Canada Northern Hard Red wheat class, which will be the home for Faller, Prosper and Elgin ND.

“We’ve heard changes are coming,” Thomson said. “We’ve taken the approach we will react after the change has happened. It’s dangerous to try and insure something based on speculation.”

All other varieties insured as “feed wheat” will have a grade guarantee of No. 1 CWGP. (The CGC has announced it’s ending the CWGP class and replacing it with the Canada Western Special Purpose class.)

If harvested production grades below the guarantees a grade factor is applied reducing the production counted for claim purposes.

The insured dollar value for feed wheat is based on a weighted average of the forecasted market returns for the respective grade guarantees.

Spring wheat varieties are insured based on the CGC’s variety designation lists in effect April 1. Spring wheats not designated as red spring wheat, prairie spring, extra strong, durum or hard white spring are insurable as feed wheat.

“If the variety of spring wheat is not declared on the Seeded Acreage Report, the associated acreage will be insured as feed wheat,” MASC says in a summary of changes for 2016.

Winter wheat

Several years ago the CGC moved some winter wheats, including CDC Falcon, from the Canada Western Red Winter class to the CWGP class. All winter wheats, including CDC Falcon will be insured as winter wheat, MASC says.

Last year, Manitoba farmers grew almost 30,000 acres of CDC Falcon, making it the second most popular winter wheat behind Emerson at 79,800 acres.

Starting this year farmers can choose not to insure high-generation seed plots (breeder, select or foundation seed) and plots sown for research purposes. If a producer decides not to insure such plots the associated production must be kept separate from insured production.

The list of crops eligible for Vegetable Acreage Loss Insurance has been expanded to include winter squash, pumpkins, peppers and leeks.

The new direct-seeding deadline for carrots is June 15.

The maximum coverage for strawberries, which is now considered an optional crop for the Continuous Hail Insurance Option (CHIO), has been increased to $3,000 per acre from $2,000.

Hail Insurance is now available on winter squash, pumpkins, peppers and leeks, which are also optional CHIO crops.

Basic hail insurance premiums are slightly higher in certain risk areas due to the relatively high losses in 2015.

Insurance credit

Starting April 1, cattle producers can get a one-time interest rate credit of 0.25 per cent when financing livestock through MASC’s Stocker Loan program if they purchase a Western Livestock Price Insurance Program (WLPIP) policy, Kostyshyn announced Jan. 18 in Brandon.

“This (interest rate cut) is an effort on our part to get people to think about the Western Livestock Price Insurance Program,” Thomson said.

“It’s a good combination.”

Introduced in 2014, the WLPIP for cattle and hogs provides Manitoba farmers with protection against price risk. The program has been working, Thomson said.

“We think we’ve paid out around $600,000 in 2015, which is pretty substantial,” he said.

MASC, which started offering licensed pedigreed seed inspection services last year, will again in 2016, Thomson said.

Most crop insurance premiums are shared 40 per cent by farmers, 36 per cent by the federal government and 24 per cent by the province.

Farmers’ premium rates for each crop are determined by the crop’s designated Risk Area and claim history, which establishes eligibility for any premium discount or surcharge.

About the author

Reporter

Allan Dawson is a reporter with the Manitoba Co-operator based near Miami, Man. Covering agriculture since 1980, Dawson has spent most of his career with the Co-operator except for several years with Farmers’ Independent Weekly and before that a Morden-Winkler area radio station.

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