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Lower crop insurance premiums, in 2018

The pre-harvest deductible on corn and soybeans is ending and CHNR wheat gets its own category

A host of changes, including lower premiums, are coming to crop insurance for the coming season.

Speaking at Ag Days on Jan. 16 Ralph Eichler, the provincial agriculture minister told farmers they can expect to pay less, to no longer have pre-harvest deductibles for corn and soybeans, and to see changes in soybean coverage and new coverage for novel crops under the AgriInsurance program.

“These improvements have been implemented to reflect changes in the industry by ensuring better coverage for soybeans, hard red wheat and new emerging crops,” Eichler said.

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Crop insurance premiums this year will, on average, decline seven per cent, Eichler said.

“That is the farmers money and some of it is run through our federal government and provincial governments, but certainly we want to be able to remain competitive, and with the increasing crop production over the last year, and very little payouts, we were able to accomplish a significant reduction in those premiums,” Eichler told reporters later.

Crop insurance coverage is expected to total $2.7 billion in 2018, he said.

Removing the pre-harvest claim deductible for corn and soybeans, “will provide equitable coverage for all major crops,” the Manitoba government said in a news release.

It’s something the Manitoba Corn Growers Association, Manitoba Pulse & Soybean Growers and Keystone Agricultural Producers (KAP), have been lobbying for since the deduction was introduced in 2010 following a poor quality corn crop in 2009.

That year much of Manitoba’s corn crop was mouldy and farmers had the choice of having their crop written off, or harvesting it. What was harvested averaged just 45 bushels an acre.

The deductible that was introduced resulted in farmers, only get 85 per cent of their insurance coverage when making pre-harvest claims on corn and soybeans.

In April 2011 Paul Bonnet, then MASC’s vice-president of research and programs, told a KAP meeting the change was made for two reasons. One was so farmers who don’t harvest a crop aren’t financially better off than those who do. Harvesting corn is expensive and almost always includes drying the crop.

“The other reason was frankly a budget reduction initiative,” Bonnet said. “Every year the government’s treasury board gives us some targets we have to meet. In that year we had to cut something in the program in order to meet our budget target.

“It wasn’t a palatable decision, but it was one the board decided was the least objectionable of the ones we have available.”

Crop insurance is also setting up a separate category for the Canadian Grain Commission’s (CGC) new Canada Northern Hard Red Wheat (CNHR) milling wheat class, to reflect higher expected values and yields than other varieties in the MASC’s feed wheat category, which CNHR has been in until now.

The high-yielding American Dark North Spring varieties Fall, Prosper and Elgin ND are in the CNHR class.

Most other CGC milling wheat classes have their own category under crop insurance, including red spring wheat, which covers the Canada Western Red spring class.

Other crop insurance changes for the 2018 include:

  • Creating a permanent insurance area to protect more than 200,000 acres of soybeans grown in areas previously eligible for coverage only on a test basis.
  • Changing the soybean premium rate calculation to put more emphasis on actual losses, which will benefit producers and governments by lowering premiums.
  • Introducing a novel crops insurance program for new and non-traditional crops (quinoa for example), which is expected to include 10,000 acres and represent about $1.8 million in coverage.
  • Continuing coverage for feed wheat and other wheat varieties under one category called ‘other spring wheat.’

More than 8,400 farms are enrolled in crop insurance with about 60 per cent of the premiums covered by the Manitoba and Canadian governments and 40 per cent by farmers.

Manitoba has the highest level of crop insurance participation in Canada, covering more than 70 different crops and encompassing more than 90 per cent of annual crop acres.

Crop insurance is also available to protect forage yields, as well as stand establishment, and to assist farmers who cannot seed in the spring due to wet conditions.

The total federal and provincial government share of crop insurance premiums for 2018-19 is expected to be $130.9 million, the Manitoba government release said.

About the author

Reporter

Allan Dawson

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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