New forage insurance to take effect in 2014

Interlake ranchers attending the Manitoba Beef Producers district meeting here became the first in the province to get details on a new suite of forage insurance programs offered under AgriInsurance in 2014.

“I have to say I am thrilled,” said MBP general manager, Cam Dahl. “I really do think the forage insurance program that was announced is going to make a significant difference.”

Under the new programs, producers will be able to choose between select hay insurance, which provides quality and production guarantees for different forage types on an individual basis, and basic hay insurance, which insures against production losses on a whole-farm basis at a lower cost. Other options include a harvest flood option for coarse hay, if excess moisture prevents harvest, and individualized relative feed values for alfalfa producers.

Existing features such as forage establishment insurance and pasture insurance will continue to be available to producers. However, the option of 50 per cent coverage is no longer on the table.

“The trigger was 50 per cent of your comparable production, so I consider having half a crop a disaster, and when you have half a crop you still don’t have 50 per cent of your comparable and there’s still no payout — so how effective is that?” said Rheal Bernard, a manager with Manitoba Agricultural Services Corporation (MASC).

“Now it is effective… there are only two triggers, which are at 70 and 80 per cent,” he said, adding he believes the new programs will lead to more producers purchasing forage insurance.

“I definitely, truly believe that we have a product that is salable, and we hope to double our acres,” Bernard said. “It offers more flexibility, you can select some crops and deselect others under one program… and it’s affordable, the premiums are lower than under the old program.”

The response from farm organizations to the new programs was enthusiastic.

“It’s certainly something our members have been asking for — and it appears MASC has responded to most of their requests in creating this revolutionary program,” said Doug Chorney, president of Keystone Agricultural Producers. “It means that producers in this province will now have a good risk management tool for both forage crops and pastures.”

Wanda McFadyen, executive director of the Manitoba Forage and Grassland Association, participated in the consultation process leading up to the new forage insurance programs. “It will be a huge benefit to our members,” she said.

But reactions were more mixed when it came to the brand new hay disaster benefit, which is provided to those with either select or basic hay insurance.

“It’s meant to cover the associated costs with a province-wide shortfall; basically it’s meant to replace ad hoc programming,” said the MASC representative.

The hay disaster benefit is triggered when 20 per cent of insured producers have a yield that is less than 50 per cent of a province’s long-term average. Flooding in the years 2003 and 2009 would have triggered the benefit had it existed at that time.

However, many in attendance at the Ashern meeting experienced severe flooding in 2011. They believe the new benefit leaves them high and dry.

“We saw flooding because water was diverted from Winnipeg,” said Reg Schwartz. “Now those acres are probably totally uninsurable.”

Others questioned how effective the trigger level would be in providing protection.

“I have concerns with the disaster component,” said rancher Rick Yanke. “Especially when they talk about a province-wide trigger, because quite often there’s a problem in one area of the province while other areas are fine… I thought it should be more of a regional trigger.”

Bernard said the trigger point is substantial because the producer pays no premium for the disaster benefit. It’s fully funded by the federal and provincial governments.

But he acknowledges it isn’t perfect.

“To make it affordable for everyone else, we kind of had to… limit our liabilities in some instances where we’re not accepting cattails, we’re not accepting black dirt as insurable, whereas in the past… they possibly could have insured those acres,” Bernard said.

About the author

Reporter

Shannon VanRaes is a journalist and photojournalist at the Manitoba Co-operator. She also writes a weekly urban affairs column for Metro Winnipeg, and has previously reported for the Winnipeg Sun, Outwords Magazine and the Portage Daily Graphic.

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