Manitoba farmers can expect record crop insurance payouts this year after an exceptionally wet spring followed by dry conditions most of the summer.
Farmers will also pay higher crop insurance premiums next year to build up the program s reserves, drawn down by big payouts for the second year in a row.
Craig Thomson, vice-president of insurance operations with the Manitoba Crop Insurance Corporation (MASC), estimates AgriInsurance payouts will exceed $300 million based on around 7,000 post-harvest claims, plus $162 million paid against 5,800 claims from farmers unable to seed a record 3.1 million acres because they were too wet.
Overall for AgriInsurance it s going to be one of our most expensive years in terms of payouts, Thomson told the Keystone Agricultural Producers General Council meeting Oct. 27.
The previous record payout was $295.5 million in 2005.
The final total won t be known probably until early next year. Farmers have until Nov. 30 to submit their Harvest Production Reports to MASC.
Last year crop insurance payments totalled $200 million, including $28 million under Excess Moisture Insurance.
As of March 31, 2011 MASC had a $288-million surplus. In an interview Oct. 28 MASC general manager Neil Hamilton estimated that surplus could be cut to between $40 million and $120 million, depending on total payouts this year.
MASC wants its reserve to be one to 1.5 times its total premiums to maintain the program s financial integrity, Hamilton said. If premiums total $200 million the reserve should be $200 million to $300 million.
When the reserve falls below $200 million, MASC levies a premium surcharge and when it exceeds $300 million, premiums are discounted.
The reserves can build very quickly if we have a couple of good years, he said.
The previous unseeded record was 1.4 million acres also set in 2005. That year farmers received $58.3 million under Excess Moisture Insurance. In 2010, 739,000 acres went unseeded due to excessive moisture triggering almost $28 million in payments.
Thomson updated payouts being issued under the AgriRecovery program. The Excess Moisture Assistance program pays eligible farmers $30 an acre on acres too wet to seed whether they were enrolled in AgriInsurance or not.
Around $93 million has been paid on 7,300 claims covering 3.1 million acres, Thomson said.
Eligible farmers could also apply for $30 an acre on land where seeded crops drowned. MASC received 3,300 claims based on 500,000 acres. So far $10 million has been paid. Payments are expected to total $15 million.
Some KAP delegates complained farmers yielding as little as two bushels an acre didn t qualify for support. Thomson stressed the program was meant to compensate farmers for crops completely wiped out by too much water. If they harvested anything at all, they were ineligible.
Dauphin farmer Dow Dewar noted some farmers might have run over drowned crops with their combines to cut and chop the weeds and taken in a little bit of crop that survived.
Thomson said officials are more worried about farmers who harvested 15 bushels per acre. We re trying to find the people who purposefully misdeclared and deal with them, Thomson said.
There were 650 applications under the Forage Restoration Program. Eligible farmers will get $50 an acre next year to restore tame forage.
Plumas farmer Lorne Rossnagel suggested the deadline be extended because it takes time to break up alfalfa and establish a good seedbed.
Under the Greenfeed Assistance Program farmers can get $15 an acre for greenfeed seeded earlier this year. There were 1,100 applications with 1,000 claims totalling $1.9 million already paid, Thomson said.
Fewer than 25 claims were made under a program that pays farmers to move their livestock to feed or vice versa. (This doesn t include a separate program for farmers around Lake Manitoba.)
Under the Forage Shortfall Assistance program eligible farmers can get 60 cents a day per cow-calf pair. There were 120 claims. Only five payouts, totalling $67,000 had been made as of last week.
The Flood Infrastructure and Individual Assessment program is designed to cover losses not covered under the Disaster Financial Assistance program or Flood 2011 Building and Recovery Plan. Thomson said there were 115 applications with 11 approved for an advance payment.
Farmers in the Hoop and Holler and Portage Diversion areas are eligible for 100 per cent crop insurance coverage without paying a premium because the province diverted flood waters their way to protect Assiniboine River dikes downstream of Portage la Prairie. Payouts have been delayed as MASC struggles to get crop insurance data transferred to a different computer system, Thomson said.
Our apologies but it has been time consuming and extremely challenging for us to do, he said, adding that payments will soon be made.