Regina– Crop Insurance coverage is going up due to higher commodity prices, and rates are going up as well, but the premium cost per dollar of coverage continues to decline. There’s a new pilot program for vegetables, and changes for forage and chickpeas, too.
On Canada Agriculture Day, Saskatchewan Deputy Premier and Finance Minister Donna Harpauer and, through a press release, federal Minister of Agriculture and Agri-Food Marie-Claude Bibeau, announced enhancements to the 2021 Crop Insurance Program. This year, Crop Insurance coverage will reach a record level due to higher commodity prices and increased yield coverage.
“Farmers across Saskatchewan continue to step up despite all the challenges thrown their way during the COVID-19 pandemic,” Bibeau said in a release. “These improvements to the Crop Insurance Program give Saskatchewan farmers more coverage they can count on. We will continue working with our provincial counterparts to ensure farmers have the risk management tools to help their stability and growth.”
Asked if the COVID-19 pandemic had an impact on crop insurance, Harpauer said, “None.”
“For over 60 years, the Crop Insurance Program has supported Saskatchewan producers with reliable coverage and exceptional customer service,” Harpauer said. “We are committed to providing producers with the insurance programs they need and the enhancements announced today build upon the current suite of programs.”
Coverage going up
Saskatchewan Crop Insurance Corporation (SCIC) said it “continues to provide high coverage as we enter a new growing season.”
Coverage will reach a record level of $273 per acre due to higher commodity prices and increased yield coverage, up from $224 in 2020. This represents a 22 per cent increase in coverage. The average premium cost per dollar of coverage continues to decline.
There was a 42 per cent reduction in average premium cost per dollar of coverage over the last 10 years. This includes a 20 per cent reduction directly resulting from the strong financial position of the program, SCIC said. However, due to the increased coverage for 2021, the average premium for producers will be higher than in 2020. The average premium per acre will be $8.59, up from $7.40.
Harpauer said, “Establishment benefit values are reviewed annually. This year, the establishment benefit values for canola, lentils, chickpeas and corn have increased. Canola is now $70 per acre. Large green lentils are $50 per acre and red lentils are $30 per acre. Large Kabuli chickpeas are $65 per acre and Small Kabuli chickpeas are $45 per acre. Corn is $95 per acre.”
New forage options
New in 2021, producers growing tame hay will have additional options when insuring their hay acres. Crop Insurance customers now have the choice to insure their tame hay acres under the Forage Rainfall Insurance Program (FRIP) or the Multi-Peril Crop Insurance Program. Coverage options can be customized for each farming operation. Under FRIP, payments will be calculated based on rainfall levels, instead of overall yields.
“Saskatchewan cattle producers face a lot of risks. It is good to see the programs they can access through SCIC continue to evolve,” Saskatchewan Cattlemen’s Association Chair Arnold Balicki said in a release. “Adding tame hay to the Forage Rainfall Insurance Program and extending the calf coverage deadline and hours of operation for Livestock Price Insurance are all positive. I encourage cattle producers to look into SCIC’s programs as there were many improvements in recent years.”
“Forage producers will also see an increase in Native Forage Establishment Benefit coverage. The Native Forage Establishment Benefit provides coverage on newly seeded native forage acres. The coverage is increasing from $75 to $200. Other Forage Establishment Benefit prices seeing an increase includes tame hay to $90 per acre and sweetclover to $65 per acre,” Harpauer said. Forage producers are encouraged to review available coverage options through SCIC's Forage Option and Weather-Based Programs.
Vegetable pilot program
“In 2021, SCIC is also introducing coverage for large scale vegetable production. Commercial vegetable growers will now have access to the commercial vegetable pilot program, which will provide standalone coverage for damage to cabbage and pumpkin crops,” Harpauer said.
SCIC has been working with the Saskatchewan Vegetable Growers' Association to develop programming for the growing commercial vegetable sector in Saskatchewan. The impact of a crop failure on vegetable operations could be significant as a relatively small number of acres has extremely high value. A minimum of eight acres is required to participate in the program. SCIC will continue to explore insurance coverage options for the Commercial Vegetable Program.
Last summer, the Government of Saskatchewan made one of the largest announcements for agriculture in this province in years, laying out a plan for $4 billion in expansion of irrigation in central Saskatchewan, with an eye to growing different crops, including vegetables. Asked how this will impact Crop Insurance, Harpauer responded, “That’s a ways into the future. So I think it’s important that they’re doing the pilot this year. And we’ll see how that goes. As production increases in vegetables and other crops that benefit for irrigation, I think it’s been demonstrated, here in Saskatchewan, that Crop Insurance officials are very nimble in addressing the crops as they change. I know, myself, from when I was a producer, to today, the crops have changed significantly, and Crop Insurance had been there for all the changes.”
Saskatchewan has also become a significant producer of chickpeas. SCIC is updating the base grade for large-seeded Kabuli chickpeas to reflect current production and marketing patterns. This increases the insured price and the quality coverage.
Carl Potts, executive director of Saskatchewan Pulse Growers, said, “I think the changes to the chickpeas base grade calculation just better reflects the size and the quality of the chickpeas that chickpea producers are producing these days. It’s simply a better reflection of the product the producers are producing, and should increase the overall level of coverage for producers.”
Potts called it “a welcome development.”
Saskatchewan Pulse Growers Board Chair Shaun Dyrland said, “This change should increase coverage levels for most of the 300 chickpea producers in the province.”
Asked if there were any trends with farmers moving towards a particular crop, or any move into a “Cinderella crop” in 2021, SCIC acting president and CEO Jeff Morrow responded, “One of the main crops in the province, and the main crops in terms of acres and liability for Crop Insurance programs is canola. That is certainly the most predominant crop. And I say our top three, other than canola, are wheat, duram and peas.”
He said it’s up to producers to decide what they plant, but historically canola has been top.
Ray Orb of the Saskatchewan Association of Rural Municipalities said, “We're actually quite pleased about some of the enhancements, in particular, with the vegetable pilot program. We think that will be good to create more diversity into the province’s agriculture industry.
“We're also pleased to be able to look at some of the things that they're also enhancing, Kabuli chickpeas in particular.
“In general, we’re favorable, and always have been favorable, to uplifting and adjusting some of the weather based insurance programs. And we think that will help our livestock producers, as far as protecting their forage crops and things like that.
“So generally, we're pleased. We see that there's an increase of about 22 per cent of the of the coverage, understanding at the same time, that will premiums will go up.”
He said generally it has served the agriculture industry well to have more coverage.
March 31, 2021, is the deadline to select insured crops and coverage levels or make additional changes to Crop Insurance contracts. Producers need to also apply, reinstate or cancel by this date.
Crop Insurance is a business risk management program supported through the Canadian Agricultural Partnership. Under Crop Insurance, premiums for most programs are shared 40 per cent by participating producers, 36 per cent by the Government of Canada and 24 per cent by the Government of Saskatchewan. Administrative expenses are fully funded by governments, 60 per cent by Canada and 40 per cent by Saskatchewan.
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