Manitoba task force recommends new insurance tools for agriculture industry

An agriculture risk management review task force in Manitoba has recommended researching and developing new insurance tools such as weather derivatives and whole-farm revenue insurance.

The recommendation was one of 25 made by the provincially appointed task force, which examined ways the industry can prepare for climate-related risks. The recommendations will also lay the foundation for future discussions on how climate change affects agriculture risk levels, Agriculture, Food and Rural Development Minister Ron Kostyshyn said in a press release on Wednesday.

The task force, comprised of industry stakeholders, provided 25 recommendations on how agricultural risk management needs to evolve to grow a competitive industry as it copes with a changing climate. Over the past year, it has reviewed research and met with producers, scientists, insurance providers and others invested in agriculture and climate change preparedness, the release said.

In recent years, there have been more frequent periods of excess moisture that have taken previously fertile land out of production, as well as flooding disasters, the report noted. “These weather-related incidents have caused massive hardship for thousands of people in our province, including many agricultural producers,” the report said. “They have also led to serious budget pressures as the province has had to deal with the financial consequences of large, co-ordinated response to emergency flooding, as well as providing relief to hard-struck producers.” [click image below to enlarge]

To help deal with the issue, the task force recommended researching and developing new insurance tools as well as the following:

• Conducting a comprehensive assessment of the role catastrophe insurance could play in mitigating the financial impact of weather-related disasters on the province (for example, reinsurance for Manitoba and municipalities);

• Continuing to develop the Excess Moisture Insurance program to ensure long-term viability;

• Restoring federal funding to public research in climate change mitigation and adaptation for the agriculture sector;

• Renewing funding in conservation districts to improve drainage or water storage in current problem areas;

• Encouraging collaboration between the Manitoba government and other partners on advanced climate and weather forecasting programs;

• Providing predictable compensation for producer’s losses due to mitigation measures; and

• Sharing elevation and water-management data to benefit agro-environment policy, government programs and on-farm best practices

The Manitoba Agriculture Risk Management Review Task Force was appointed by Kostyshyn in January 2015 to evaluate existing programs and policies used to help farmers recover from climate-related challenges such as flooding and drought. As an example, a 2011 flood in the province caused more than 7,100 people to evacuate their homes, as well as damage to more than 650 provincial and municipal roads and nearly 600 bridges. Costs associated with flood preparation, flood fighting, infrastructure repair and disaster payments reached $1.2 billion.

The report added that since 2008, business risk management programs, including AgriStability, AgriInsurance and AgriRecovery, have paid Manitoba farmers more than $3 billion.

Agriculture is a key driver of Manitoba’s economy, with sales of primary agricultural products generating almost $6 billion for the province in 2014.