Frieda Krpan has resigned from her role as chair of the Manitoba Agricultural Services Corporation (MASC), but she’s leaving behind some ideas for how the new government can save money.
“I think as a new minister, Ralph Eichler has an opportunity to look at some bigger changes,” Krpan said from her home near St. Laurent in an interview May 5. “The new government is looking for cost savings and I think it can save some money.”
Krpan said in addition to paying a bigger share of crop insurance costs, AgriStability should be replaced with whole-farm revenue insurance and MASC should be rolled into the Department of Agriculture rather than remaining a Crown corporation.
“I’ve thought about this long and hard,” she said. “This is not new thinking on my part.”
Right now Manitoba farmers pay about 40 per cent of the total cost of crop insurance and the federal and Manitoba governments pay 60 per cent, Krpan said.
“I think they (farmers) should pay a minimum half of the premium,” she said.
“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.”
Farmers who ignore best practices, such as rotating crops or growing a wide variety of crops, should also pay higher premiums because they are increasing the risk of crop failures and payouts, she added.
Some crops do better under hot conditions and others prefer it cooler; some crops are more drought tolerant, while some can survive wetter conditions. By growing a variety of crops the farmer hedges their bets.
“Why should taxpayers be expected to pay insurance for those who have really incorrect farming practices? I don’t think that’s right,” Krpan said. “And I think now with climate change those things are going to come back to bite us in a big way. Clubroot is an example and there are others. I think farmers who farm properly, who rotate well, who do all the things that have to be done — drainage and other farm practices — they are the people who should have the lowest rates.”
Under existing rules MASC can deny an insurance claim if it believes the loss was due to poor farming practices. Moreover, as claims go up the farmer’s premium increases, while coverage falls. Eventually bad farmers pay a price.
“In the end, yes, but it takes time,” Krpan said. “In the meantime, everything is pooled and you’re really asking others to pay for what you do wrong. You don’t want anybody farming a program.”
Krpan said she wants Eichler to consider using the upcoming federal-provincial negotiations for Growing Forward 3 to explore replacing AgriStability with a whole-farm revenue insurance program — a move some farm groups have floated as well.
Whole-farm (price and crop) insurance is an idea the Canadian Canola Growers Association presented last year to the Agriculture Risk Management Review Task Force set up by the previous provincial government (see sidebar). Krpan was a task force member.
AgriStability isn’t working for most farmers, but especially those, who through good farming practices and diversification, have reduced their risk of crop failure, Krpan said.
Some farmers have abandoned AgriStability because they see little value. The current program is unfair to the farmers who should be rewarded for reducing their risk, she said.
The Manitoba government could also save money if MASC was a division of the Manitoba Department of Agriculture rather than a stand-alone Crown corporation, Krpan said.
“I’m a real believer in closer co-operation between MAFRD (Manitoba Agriculture, Food and Rural Development) and MASC,” Krpan said. “I think there are a lot of synergies that are not exploited at this point.
“At the end of the day MASC and MAFRD have the same clients so there is a real synergy that could be had… it would be more cost effective.”
The argument for a Crown corporation is it has more flexibility and autonomy than a government department. MASC has a huge budget, with a big part of it coming from the federal government.
But Krpan notes that ultimately MASC is responsible to the provincial minister of agriculture and the provincial government.
Krpan, who has long ties to Manitoba’s New Democratic Party, was appointed MASC chair in 2013 by the previous NDP government. But she stepped down last week due to a family illness.
“I just need to be home more,” Krpan said. “It’s a matter of reducing the stress. The change in government has absolutely nothing to do with it.”
In fact, Krypan said she would’ve preferred to stay to assist with an orderly transition.