Crop Insurance Is The Farmer’s First Line Of Defence: Struthers

March 31 is the crop insurance sign-up deadline and with the possibility of another wet spring farmers are being urged not only to enrol, but to review their Excess Moisture Insurance (EMI) options and consider forage insurance.

“We need a dry spr ing because if we have a wet spring with five or six inches of rain through May and into June some areas of the province will be in a lot of trouble,” Craig Thomson, vice-president of insurance operations with the Manitoba Agricultural Services Corporation (MASC), which administers the federal-provincial AgriInsurance program, said in an interview March 8.

Meanwhile, crop insurance liability in Manitoba is expected to hit $2.05 billion in 2011 – the first time it has exceeded $2 billion.

That’s the amount of exposure for AgriInsurance if every crop insured in the province is wiped out.


Last year program liability was $1.73 billion. It would have been higher – $1.85 billion – if so many acres hadn’t been too wet to seed.

On average crop insurance coverage is up 11.5 per cent this year due to a 9.9 per cent increase in the dollar value of insured crops and a 1.6 per cent increase in long-term average yields.

The dollar value of No. 1 canola is set at $450 a tonne or $10.51 a bushel, while the values set for No. 2 CWRS 13.5 per cent wheat and No. 1 soybeans are $221 a tonne ($6.01) and $370 a tonne ($10.07), respectively.

Most Manitoba fields are already saturated from excessive rain in 2010. Last year, 739,000 acres of Manitoba cropland were too wet to seed by the June 20 deadline, resulting in almost $28 million in payouts on 635,000 acres (net of deductible) to farmers under the EMI component of crop insurance.

It was the second-highest EMI payment ever. A record 1.4 million acres went unseeded in 2005 prompting $58.3 million in payouts.


Meanwhile, most Manitoba fields are covered in more snow than normal and flooding is forecast for many parts of the province.

With so many ominous signs, Agriculture Minister Stan Struthers is encouraging farmers to protect themselves.

“Manitoba’s producers have always been responsible and many have chosen to participate in the AgriInsurance program in the past,” Struthers said in a news release last week. “We want to encourage them to continue using insurance as the first line of protection against losses.”

Farmers appear to be heeding the warnings, Thomson said. Many are inquiring about buying down their EMI deductible or topping up their coverage.

Farmers who sign up for crop insurance automatically receive Excess Moisture Insurance. The minimum coverage is for $50 an acre, costing 36 cents an acre, plus a deductible of five per cent of the farmer’s total cropped acres.

A five per cent deductible on 1,000 acres is 50 acres (1,000 acres X 5 per cent = 50 acres). If those 1,000 acres aren’t seeded due to excessive moisture the farmer will receive an EMI payout based on 950 acres.


However, when a farmer has an EMI claim, the deductible goes up five per cent the next year. So farmers who had an EMI claim in 2010 will have a 10 per cent deductible this year. The deductible for that 1,000-acre farm is now 100 acres. (Likewise, the deductible declines five per cent every year there is no claim.)

Farmers can pay extra to cut their deductible to zero. For example, a farmer with a five per cent deductible and $50-an-acre coverage will pay $1.28 an acre for zero deductible.

It will cost the farmer with a 10 per cent deductible and $50-an-acre coverage $2.21 an acre.

For an extra cost farmers can also boost their coverage to $65 an acre from $50.

Farmers can also do both. That costs $1.76 and $3.11 an acre when the deductible is five or 10 per cent, respectively.

Not all cropland is eligible for EMI, including land MASC deems to be a high risk for flooding.

Land that was too wet to seed last year and didn’t get worked is also ineligible for coverage.

EMI payouts aren’t made on claims of less than 10 acres.


EMI claims must be filed by submitting a completed Seeded Acreage Report to the farmer’s local insurance office no later than June 22. Claims registered after June 22, but on or before June 30, will be charged a late filing fee of 25 per cent of the claim to a maximum of $500.

Claims filed after June 30 will not be accepted.

Typically 9.1 million to 9.3 million acres of Manitoba land is covered by crop insurance, Thomson said. While an estimated 90 per cent of annual crops are insured only 15 to 20 per cent of tame and native hay production is, he said. Since there have been several years of ad hoc programs to assist livestock producers short of hay, farmers should consider forage insurance, he said.

Tame hay insurance includes $60 an acre for forage restoration.

Farmers signed up under the Continuous Hail Insurance Option are eligible for an increased premium discount. It was two per cent for those enrolled for two years or more in recognition of lower administration costs. However, because the program has a surplus, farmers now can get an extra one per cent discount for every year they’ve been signed up to a maximum of five per cent after five years.

MASC and Manitoba farmers are no doubt hoping for a better year in 2011. With a few claims still outstanding, total crop insurance payouts for 2010 are expected to total $200 million, including EMI claims. That’s second only to the record $295.2 million paid out in 2005.

(The previous second-highest payout was $197.7 million in 2004.)

Last year crop insurance collected $175 million in premiums.

The AgriInsurance program lost $53 million, resulting in the program’s surplus being drawn down to $283 million.

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About the author


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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