Canadian Underwriter

Highest crop insurance coverage in program history offered to Saskatchewan producers in 2016

February 26, 2016   by Canadian Underwriter

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Crop producers in Saskatchewan will have access to the highest coverage in program history, the federal Agriculture and Agri-Food Minister Lawrence MacAulay and Saskatchewan Agriculture Minister Lyle Stewart said on Thursday.

On average, coverage levels are increasing to a record $216 per acre, up from $183 per acre in 2015

The ministers announced the details of the 2016 Crop Insurance Program as well as expanded options for growing fababeans, Khorasan wheat and forage. The crop insurance budget for 2016 is $166 million. On average, coverage levels are increasing to a record $216 per acre, up from $183 per acre in 2015.

The improved coverage is a result of better forecasted crop prices and increased long-term yields, Saskatchewan Crop Insurance Corporation (SCIC) noted in a statement on Thursday. Due to an increase in coverage, the premium per acre is going up slightly to an average of $7.84 per acre from $7.06 in 2015.

More enhancements have been introduced for 2016, the statement said, noting that the insurable area for fababeans has expanded to include the entire province and insurable yields have increased reflecting the increased production of this crop. Insurance for Khorasan wheat has improved as producers can receive individual coverage for their farm – previously, coverage for this crop was based on area averages. An establishment benefit value of $30 per acre has been added for camelina, in response to the experience growers have gained with this new oilseed crop.

In response to industry feedback, the cap on the forage insurance variable and in-season price option has also been removed, SCIC said. This will allow for an increase in the market price of forage to be reflected in the claim payments of producers who select those options. This year, producers will have higher forage coverage as insured prices have risen more than 30% and forage establishment coverage has increased from $55 to $70 per acre. Forage insurance proved effective in 2015 as substantial payments were made to producers following a spring frost and dry conditions, the release noted.

Establishment benefit values are rising for a number of crops in 2016, including soybeans, lentils, barley and Khorasan. “The establishment benefit feature provided significant support to producers last spring when newly-emerged canola was damaged by frost,” SCIC said, noting that more than 2,500 claims were quickly and effectively paid, providing more than $47 million to producers.

“Removing the cap on coverage for forage is a significant step,” commented Ryan Beierbach, chairman of the Saskatchewan Cattlemen’s Association. “Conditions last spring reminded us how important it is to have effective coverage, especially as forage costs continue to increase. We’re also facing the very real possibility of drought in the coming months. When weather turns against us, we see prices for hay multiply. This change to forage insurance will make the program more meaningful and responsive to cattle producers.”

Producers are encouraged to contact their local crop insurance office and review their coverage. Changes, renewals or new applications for a crop insurance contract need to be made by March 31, 2016. Under crop insurance, premiums for most programs are shared 40% by participating producers, 36% by the Government of Canada and 24% by the Government of Saskatchewan. Administrative expenses are fully-funded by governments, 60% by Canada and 40% by Saskatchewan.