“Farmers at the time were not insurance oriented at all.”
– HAYDEN TOLTON
To most Manitobans, former premier Duff Roblin’s main legacy will always be Duff’s Ditch – the floodway diverting spring run off from the Red River around Winnipeg that has saved the city many times.
But Roblin, who died last week at 92, also left an important legacy for Manitoba farmers: crop insurance.
Manitoba was the first province in Canada to introduce an all-risk crop insurance program involving farmers, Ottawa and the province.
And it happened under the administration of Charles Dufferin Roblin, Progressive Conservative premier from 1958 to 1967.
The concept of publicly administered shared-risk crop insurance is considered standard today. But it was a radical idea during the late 1950s, especially in a province with a cautious early history of social activism.
Indeed, Manitoba was the only Prairie province not to produce a grassroots political movement during the 1930s (Saskatchewan spawned the CCF, Alberta gave rise to Social Credit).
But Roblin was a new breed of politician. He was a visionary, as evidenced by his reforms in education, health, social welfare and public works during his nine years as Manitoba’s 14th premier. That included rural development and agriculture. Crop insurance came with that.
Crop insurance was a risky business before Roblin, with an agriculture diploma from the University of Manitoba, took office. You could buy hail insurance from private companies. But you couldn’t insure against losses from other natural causes: drought, flood, insects and disease – all fresh in the minds of Manitoba farmers who survived the Great Depression.
A provincial committee was appointed in 1939 to investigate the feasibility of crop insurance in the province. A report in the late 1940s recommended against it, saying the province couldn’t afford it.
The federal Prairie Farm Assistance Act, passed in 1939, did provide a basic form of crop insurance. Farmers were charged one per cent of their deliveries and could collect $2.50 per acre on half their acreage when yields fell below five bushels an acre. But the program was unpredictable and unpopular because farmers paid far more into it than they ever got back.
A breakthrough came around 1956 when another Manitoba commission report decided the province could afford crop insurance after all, but only with federal participation.
So after Roblin took office, his agriculture minister George Hutton began negotiating with his federal counterpart Alvin Hamilton in the Diefenbaker administration.
In July 1959, Ottawa adopted the Crop Insurance Act, providing the necessary backing for the forerunner of the Manitoba Crop Insurance Corporation. That same year, the Roblin government passed its own crop insurance legislation, enabling farmers to enrol for the 1960 crop. They could insure four crops – wheat, oats, barley and flax – against hail and other natural disasters.
Around the same time, the province created the Manitoba Agricultural Credit Corporation to help producers obtain farm loans.
It had been a tough battle for Roblin, who had to fight forces within the industry and his own party who were against the idea of government getting involved in the insurance business.
“The notion of government sharing the risk was a fundamental concept that Roblin had a hard time selling to some of the small-c conservatives,” said Ed Tyrchniewicz, a University of Manitoba senior scholar who, as an undergraduate, studied under agricultural economist Clay Gilson, a main architect of the program.
But it wasn’t just politicians and businessmen who opposed the plan. A lot of farmers did, too.
“It had to be really sold,” said Hayden Tolton, who joined MCIC as research director in 1962. “Farmers at the time were not insurance oriented at all.”
SELLING THE IDEA
Tolton, MCIC’s manager from 1965 to 1983, said the corporation signed up prominent local farmers as agents to go farm to farm selling crop insurance.
Such was the resistance to the new concept that, even if farmers bought into it, they wanted it kept secret, Tolton recalled.
“If you did get one to buy it, he’d say, don’t tell my neighbours I got it.”
Another early growing pain was that the program at first was a pilot available in only four test areas. That was all the federal-provincial agreement provided for at the time.
“There was a lot of reluctance to expand it to a whole-province basis until they were able to negotiate a federal-provincial reinsurance agreement,” said Neil Hamilton, president and CEO of the Manitoba Agricultural Services Corporation, which today combines crop insurance and farm credit under one umbrella.
Hamilton said Roblin was reportedly instrumental in getting an agreement on reinsurance and deficit sharing. Once that happened, the program was able to expand province-wide.
Tolton said crop insurance really took off in Manitoba after 1970 as a new generation of young business-oriented producers realized the importance of risk management.
Banks and credit unions also began demanding their clients take out crop insurance because loans would be too risky otherwise.
That’s a basic requirement among lending institutions today, said Ian Wishart, Keystone Agricultural Producers Association president.
“The size of the risk has increased so much that now it’s just foolishness to handle all that risk yourself as an individual,” Wishart said.
Today, MASC insures between 85 and 90 per cent of the crop acres in Manitoba, the highest rate in Canada.
Tyrchniewicz believes crop insurance encouraged agricultural diversification in Manitoba by proving coverage for non-traditional crops.
It also helped create a whole new mindset among farmers toward business administration, added Hamilton.
“The paradigm shift, in my mind, is moving farmers from the government giving them a handout to where it is a risk management product. They’re taking possession of their own risk management in deciding to take it or not take it and at what level to take it.” [email protected]