A call for farmers to pay a greater share of crop insurance costs isn’t sitting well with the head of the province’s general farm organization.
Dan Mazier, president of the Keystone Agricultural Producers (KAP), says he doesn’t like the idea farmers pay more for crop insurance and he doesn’t believe it would reduce crop insurance claims.
“By increasing the farmer’s share (of premium costs) and implying that it would incentivize them to do a better job, I don’t like those comments at all,” Mazier said May 13.
He was reacting to remarks made by former Manitoba Agricultural Services Corporation (MASC) chair Frieda Krpan, who resigned May 2.
MASC administers the Manitoba government’s farm lending program and AgriInsurance, cost shared by farmers and governments. Currently Manitoba farmers pay about 40 per cent of crop insurance costs and the federal and Manitoba governments 36 and 24 per cent, respectively.
“I think they (farmers) should pay at minimum half of the premium,” Krpan said May 5 in an interview. “I think there is a case to be made the farmers can easily pay a little bit more because if they have to pay more they also become more careful about how they plant and what they plant. Their practices will change.”
Mazier said farmers do a good job now and are not taking advantage of crop insurance as Krpan seems to imply. Before any changes, the impact should be thoroughly investigated, he added.
Krpan also said farmers who don’t follow proper practices, including crop rotation, should pay higher premiums.
But Mazier said crop insurance already has a system to discourage bad practices.
“The individual productivity index (IPI) under crop insurance is the check against everybody else in the region,” he said. “It goes up and down according to the number of claims that you had. Your insurance would be more expensive and you get less coverage as the IPI goes down. That’s built into the system if you are doing poor farming practices.”
Most farmers rotate crops because it’s a proven way to boost yields and reduce pests, Mazier said. But there are times when factors such as bad weather that delays seeding leaves a farmer fewer options.
“I think the farmer needs to be left with the best tools possible to make sure that his business moves on from that disaster,” he said. “If you handcuff him so he can’t react to the reality of Mother Nature that’s not a very good path to be going down.”
Mazier wants more information on the whole-farm revenue insurance program before passing judgment. Krpan believes it has merit and might be able to replace AgriStability — a program many farmers say isn’t a good enough risk management tool. But Mazier wonders if revenue insurance could spark countervailing duties on Canadian exports.
Mazier is also skeptical about Krpan’s suggestion MASC should be rolled into the Department of Agriculture instead of remaining a Crown corporation. Krpan contends MASC is ultimately responsible to the minister of agriculture and the government anyway.
“We brag about the great crop insurance system that we have and the high participation in Manitoba,” Mazier said. “I don’t know if I would want to mess with that too much without a lot of deep thought and discussions about why we are doing it. That would be an astronomical move to put it into the department. Then it becomes a whim of the department. We need to have it independent.”
What Mazier would like crop insurance to do is prepare for climate change and look at what new crops Manitoba farmers should be considering.
“That to me is where crop insurance needs to go rather than monkeying with the funding mechanism,” he said.