Changes coming to Excess Moisture Insurance (EMI) are aimed at reducing “moral hazard” that could undermine the program’s integrity.
“It just seemed from our experience there was a disproportionate amount of land coming into our program in wet years than there was in dry years,” David Van Deynze, the Manitoba Agricultural Services Corporation’s (MASC) manager of claim services told the Keystone Agricultural Producers’ general council meeting April 18. “That’s the reason for our caution there.”
The deadline for selecting the EMI Reduced Deductible Option and EMI Higher Dollar Value Options will be Nov. 30 of the previous crop year starting this year for the 2014 crop, MASC announced earlier this year.
Also effective for 2014, land must be added to a crop insurance contract by March 31 to be eligible for EMI coverage in that year. Land added after March 31 will continue to be eligible for coverage for seeded crops and hail, but not for EMI.
(The deadline for selecting EMI options in 2013 remained March 31 with land added until June 30 continuing to qualify for EMI.)
Rob Brunel, a District 11 delegate and farmer at Ste. Rose du Lac, said he was disappointed with the changes.
“I don’t buy extra health insurance unless I know I’ll be travelling,” he said.
MASC thought carefully because changing deadlines adds complexity to administering the program, but in the end decided it was necessary, Van Deynze said.
“We hope people select insurance because it’s a good idea to always have higher insurance coverage or always have 50 per cent coverage, not necessarily look out your window and say ‘this is what I need this year,’” he said. “It’s kind of like buying insurance for your house when it’s on fire. We don’t want to have that situation.”
Brunel said a farmer could have EMI coverage on March 31 but then decide to rent the land to a neighour April 1 and the renter wouldn’t have coverage.
“In wet years we find acres in our program that aren’t normally there and that’s, in my mind, a bigger risk than the March 31 change in selection date,” Van Deynze said in response. “There’s lots of guys who don’t insure and then all of a sudden they’re insured under someone else’s contract when it can’t be seeded (because it’s too wet). That’s a real big concern for us.”
MASC is also experimenting with insuring later-maturing crops such as corn, soybeans and edible beans, throughout agro-Manitoba. Future coverage depends on the experiment’s results, Van Deynze said. For example, MASC might decide farmers in shorter growing season areas can only insure earlier-maturing varieties.
The experiment removes borders that irked farmers. Until now a farmer might be allowed to insure corn on one side of the road, but not the other.
Meanwhile, the Manitoba Corn Growers Association is trying to determine whether the experiment is a good or bad idea, said association secretary-manager Theresa Bergsma.
“We figure they (MASC) must have done some sort of risk analysis and decided the risk wasn’t high or they wouldn’t have done it,” Bergsma said in an interview. “But where are those numbers? And if the risk is so low, is it the program we need?
“We’re really upset they did it without consultation.”
The late spring is a concern to all farmers, but especially corn growers who need a long growing season. So long as farmers can seed corn before the middle of May it should be all right, Bergsma said.
“We’re not afraid of guys trying to push the envelope,” she said. “Farmers know corn is too risky to do that with.”
Bergsma said she hopes new corn farmers are equally cautious and not emboldened by crop insurance being available in areas that traditionally haven’t grown corn.