Crop insurance program adjusted through CAP

Posted on July 29, 2021 by admin

By Nikki Jamieson
Westwind Weekly News

A crop insurance program change will allow for a higher yield threshold of crop to be salvaged for livestock feed.

The provincial and federal governments are making this adjustment to the insurance program’s Low Yield Allowance through the through the Canadian Agricultural Partnership.The allowance is a standard part of the production insurance program, and is meant for situations of extreme heat and severe drought. Alberta is doubling the low yield threshold to allow for more cereal or pulse crops to be salvaged for livestock feed. The province, together with the federal government, is making this adjustment to help ease ease feed shortages for livestock during the current drought.

“Our Government is working in close collaboration with provinces to ensure farmers who are experiencing the impacts of extreme weather caused by climate change have access to the support they need. This adjustment to the crop insurance program will increase access to feed for livestock producers when they need it most, to ensure they can get through this crisis,” said Marie-Claude Bibeau, Minister of Agriculture and Agri-Food Canada, in a press release.

“Alberta’s hardworking farmers and ranchers have been hit with dry conditions that threaten their livelihoods. We will do everything we can to help Alberta’s agriculture industry make the best of a terrible situation. We’ve heard industry’s call for help, and this change will help farmers and ensure some good can come out of these crops,” said Devin Dreeshen, Minister of Agriculture and Forestry for Alberta.

Since mid-June, high temperatures and drought have resulted in a significant deterioration of crops province-wide. As current weather conditions are not improving, further crop deterioration is expected.

The adjustment to the insurance program aims to encourage producers to act quickly to salvage crops for livestock feed, rather than watch their fields continue to deteriorate and risk harvesting nothing. As their crops would otherwise be covered by crop insurance, there will likely be minimal additional payments resulting from this decision.

“We recognize that this year’s conditions have had a significant impact on our producers—and we’ve been here to listen, take feedback, and mobilize our teams as quickly and efficiently as possible,” said Darryl Kay, CEO of Agriculture Financial Services Corporation.

Under CAP, AgriInsurance 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 Alberta government. Administrative expenses are paid 60 per cent by Canada and 40 per cent by Alberta. Business risk management programs include: AgriInvest, AgriStability, AgriInsurance and AgriRecovery. In Alberta, the agriculture industry receives over $300 million in annual assistance from the provincial government through the BRM programs. A number of these programs are available through Agriculture Financial Services Corporation (AFSC).

Alberta’s AFSC has a total of 119 active adjustment team members, and the government has advised crop adjusters to be flexible and complete early assessments with affected crop and hay land.

Earlier in July, Alberta, Saskatchewan, Manitoba and Ontario had received verbal commitment from the federal government that a joint AgriRecovery program will be initiated to support producers affected by drought conditions prior to a federal election. and assessments are currently underway.

Alberta had also announced a 20 per cent reduction in premium costs for crop, pasture and forage insurance earlier this year which protects against weather-related production loss. As a result, almost 400 additional farmers and ranchers enrolled in crop, pasture and forage insurance; almost 1,400 farmers and ranchers increased their level of crop, pasture and forage insurance coverage; and almost 230 clients re-enrolled in crop, pasture and forage insurance after cancelling their subscriptions in 2020 or prior years.

The adjustments to crop insurance are in addition to other measures taken by the province to ensure farmers are supported during this difficult time, such as formally requesting the federal government initiate an AgriRecovery assessment; asking the federal government to ensure all significantly affected municipalities are included as eligible in the designation for the federal Livestock Tax Deferral provision, which would allow farmers who sell part of their breeding herd due to drought in a prescribed drought region to defer a portion of sale proceeds to the following year; and increasing the percentage paid on interim payments under AgriStability.

Responding to the announcement, Grain Growers of Canada (GGC) Chair Andre Harpe thanked Minister Bibeau for invoking the late participation provision for AgriStability in a press release.

“We are very grateful for last week’s announcement,” said Harpe. “Right now, AgriStability is the only program that can offer some meaningful support to Canada’s grain farmers, many of whom are facing a devastating impact from this year’s drought.”

While the announcement allows producers who have not yet enrolled in AgriStability can still access program support, provided the provinces invoke the late participation provision, the GGC cautioned that they will not not feel the full effects of these measures until the compensation rate for the program is increased from 70 to 80 per cent, a move which will rely on cost-sharing with the individual provinces and territories.

“This is a time where we must come together,” said Harpe. “We need everyone at the table to avoid playing politics and act quickly to provide an actionable and accessible support system for farmers.”

Before putting a crop to an alternative use, talk first to your AFSC branch office. Priority will be given to clients who want to use crops for immediate pasture or clients who want to silage or bale crops.