How prosperous Saskatchewan agriculture has become is evident in a couple recent developments.
The first comes in the less-than-pleasing news from Agriculture Minister Lyle Stewart that Saskatchewan Crop Insurance premiums will increase by a whopping 12 per cent this crop year.
The double-digit hike will mean coverage levels in 2013 will increase to a record $194 per acre — a $20-an-acre increase from last year and double the level of courage from 2007.
In order to deal with the potential additional payout, the Saskatchewan Party government is setting aside a record crop insurance budget of $198 million. So premium rates will have to increase to an average of $9.98 per acre from $8.91 per acre in 2012.
Crop Insurance cited the need for addition private reinsurance coverage — a move that Stewart said was needed because liabilities have become higher because of the increase in commodity prices.
In fact, total program liabilities have also more than doubled in just five years to $5 billion this year from $2 billion in 2008.
“Reinsurance is a way of sharing some of the risk with private industry in the event of a large claim year,” added Shawn Jaques, president and CEO of SCIC. “It will help stabilize producers’ premiums, should they have that (large claim).”
Also of interest in the Crop Insurance announcement was the news that hard red spring wheat and oats will be eligible for yield trending that recognizes the recent improvement in yields over historical trends. For hard red spring wheat, the increase will be nine per cent while oats yield will increase 13 per cent, on average.
Stewart also stressed that this will be the second year without the ad hoc AgriRecovery coverage, so producers cannot rely on bailouts and need to seriously consider enrolling in crop insurance.
So what is all this really telling us?
Well, mostly that farming is more prosperous, but that it is also becoming big business.
Disaster relief protecting the livelihood of relatively small family farm has gone the way of getting a single-desk seller to market your grain. Instead, the expectation today is for producers to run their farms like a business.
This also seemed to be the message from Canadian agricultural leaders that emerged from the recent inaugural “Agricultural Awareness” summit in Regina.
The tone of the event was significantly optimistic — especially when contrasted with the historic gloomy mood of such agricultural gatherings of where discussion was dominated by low commodity prices, tariffs and the need for subsidies to competing against aggressive American and European Union farm subsidies.
But as a recent editorial in the Regina Leader-Post aptly put it:
“This isn’t your grandfather’s version of Saskatchewan agriculture.”
Just how big Saskatchewan farming has gotten can be measured in agri-food exports — $11-billion worth in 2012, which surpassed energy exports in this province.
In a province where all the economic talk seems to focus on oil and potash, it’s important we remind ourselves that the backbone of our economy has been and still is agriculture.
And it’s great to know that agriculture is more prosperous than ever, albeit, it is a very different kind of prosperity.
Long gone are the days when small farms were run by new immigrants who supported the small communities that grew up around the local elevator every nine miles along the rail lines.
The elevators and rail lines are long gone, now. And the section farm has been long replaced by operations the size of entire townships.
But while many bemoan this passage, it shouldn’t be loss that farming is contributing more to the Saskatchewan economy than every before.
It is, however, different than the farming we once knew. It is big business.
Murray Mandryk has been covering provincial politics for over 22 years.