AgriStability might be taking up news headlines when it comes to business risk management, but the beef sector also has a wish list to overhaul Livestock Price Insurance.
Three such asks, including several that echo stances already made at the national level through the Canadian Cattlemen’s Association (CCA), made the docket for the Manitoba Beef Producers (MBP) annual meeting Feb. 11.
Business risk management, including Livestock Price Insurance, has taken a new round in the spotlight, with talks started on the next federal-provincial agricultural policy framework. The Canadian Agricultural Partnership (CAP) is set to expire in 2023.
With negotiations started for the eventual successor to the Canadian Agricultural Partnership, Manitoba’s cattle sector is adding its two cents on what the next iteration of price insurance should look like.
The province’s beef producers threw their support behind the development of a national price insurance program — rather than the current program limited to Western Canada.
MBP would also see the program made permanent, rather than relying on renewal with every new policy framework. Both echo pitches already made by the CCA.
The 2019 report from the CCA’s Domestic Agriculture Policy and Regulations Committee noted the organization’s efforts to push price discovery in Eastern Canada, and particularly in the Maritimes. In an October 2020 report, CCA president Bob Lowe also noted the start of the Eastern Price Insurance program last June, a project that hopes to develop feeder and calf price indices and, at the time of the report, was set to wrap up this April. Lowe also noted the call for a permanent price insurance program.
The idea of a national program has already gained a stamp of approval from the provincial government. During his opening remarks to the Manitoba Beef Producers Feb. 11, Agriculture and Resource Development Minister Blaine Pedersen said price insurance, “needs to become a national program.”
“Our goal is to look at new approaches to business risk management that are more effective and more equitable to all agricultural producers and part of this should include, to our mind, the Livestock Price Insurance,” he said.
The province is advocating for price insurance to become national under the eventual new framework, he later added via email.
MBP president Tyler Fulton said he is encouraged by Pedersen’s remarks.
Proponents argued that the change would put Livestock Price Insurance on par with other commodities.
Insurance for those other commodities has, “very good support federally and provincially and, right now, the Livestock Price Insurance program simply does not,” Tom Teichroeb, who spoke on behalf of the resolution, said. “It is very, very expensive, so the basis for this is to have a similar cost-share feature as crop insurance does, for example.”
Producers are on the hook for 40 per cent of premium cost for most AgriInsurance programs, according to materials from the Manitoba Agricultural Services Corporation (MASC), while the provincial and federal governments shoulder 24 per cent and 36 per cent of the cost, respectively. Livestock Price Insurance premiums, meanwhile, are producer paid, although program development and administration costs fall to the federal government, as do any shortfalls, should a year’s payouts overtake dollars paid in.
Cattle producers have long argued that the pricing structure makes price insurance prohibitively expensive, and bringing costs down might entice more producers to buy policies.
Manitoba insures about 10 per cent of its calves with the program, MASC told the Co-operator last June, compared to the about 90 per cent of Manitoba’s crops that get covered by crop insurance every year. Cost featured in the concerns with the program, MBP said at that time, along with program complexity.
“I think what governments like to hear is that programs are working,” Fulton said. “There’s little modest modifications and so on that we can make and, for that matter, we can look for some bigger changes, but the feedback in general from the cattle industry in Western Canada is that livestock price insurance works, so that gives me optimism that we’ll continue to see interest in developing and modifying to more accurately reflect the risks that cattle producers are incurring.”
Producers this year will have weeks longer to purchase their policies, and more hours during the day to access the program. Policies can now be purchased from 3 p.m. to midnight on Tuesdays, Wednesdays and Thursdays, with a similar time frame for settlement hours on Mondays. Likewise, producers now have until June 10 to buy calf policies, compared to the old deadline of May 27.
Perhaps most significant, Fulton said, producers with the program now have a longer settlement period. Possible expiry dates up to Feb. 21, 2022 are now on offer, according to MASC.
“What that does is it addresses producers who calve late and are retaining ownership and selling in, for example, January and February,” Fulton said. “Previous to this change, we have not had any product that really reflects the risk that those producers are incurring.”
Those late-calving producers are a growing part of the industry, he noted.
The changes were announced by provincial insurance providers after those issues were brought up by a multi-stakeholder, multi-provincial working group, of which MBP took part.
That working group is ongoing and Fulton expects further productive collaboration, he said, although he added that something like a shift from producer-funded premiums is a bigger challenge.
“That’s going to be a bigger conversation with government, but the conversations that we’ve had with the administrators of the program have really born fruit in just the last few months,” he said.