Saskatchewan budgets $240 million in 2015-16 for farm risk management programs

Claims under the Saskatchewan’s Provincial Disaster Assistance Program are contributing to higher-than budgeted overall government spending this year, while lower-than-budged crop insurance claims are the main reason agriculture spending will be $44 million lower than expected in 2014-15, the provincial government announced Wednesday.

Meanwhile, the 2015-16 budget, tabled Wednesday by Finance Minister Ken Krawetz, includes $240 million to fund business risk management programs – including crop insurance – for farmers.

“The 2015-16 Agriculture Budget also contains $240 million to fully fund business risk management programs such as Crop Insurance, AgriStability and AgriInvest to support farming operations as they look to grow and expand,” the provincial government said in a backgrounder. “The 2015 Crop Insurance Program includes ongoing enhancements giving producers more choice and flexibility. As well, Crop Insurance premiums are decreasing for producers while coverage levels, on average, are increasing to $183 per acre, up from $162 per acre in 2014.”

AgriStability is “a margin-based program that provides income support when a producer experiences larger income losses,” Saskatchewan Crop Insurance Corp. says on its website. Under the Growing Forward 2 agreement between Ottawa and the provinces, which covers 2013 through 2018, costs are shared by the federal and provincial governments.

AgriInvest is a federal program that lets producers “set money aside which can be used to recover from small income shortfalls, or to make investments to reduce on-farm risks.”

Related: Farm groups in Manitoba, Saskatchewan urge long term solution to flooding

Saskatchewan’s government is budgeting a $107-million surplus for 2015-16, with revenues of $14.28 billion and expenditures of $14.173 billion.

For the current fiscal year, the province originally budgeted a surplus of $110.3 million. It is now forecasting a surplus of $40.5 million for the current fiscal year.

The province said Wednesday that major spending increases, over budget, for the 2014-15 fiscal year, include “a $129 million increase in Protection of Persons and Property, primarily for claims under the Provincial Disaster Assistance Program.” The province is also forecasting a $27 million increase, in 2014-15, in its transportation spending, “primarily for emergency flood repairs and winter road maintenance.”

Those increases are “partially offset” by a $44 million drop in agriculture department spending, “almost entirely due to lower-than-budgeted crop insurance claims.”

Related: Saskatchewan buying reinsurance for crop losses

For 2014-15, revenue is forecast at $14.147 billion and was originally budgeted at $14.109 billion. Expenses, originally budgeted at $13.99 billion for 2014-15, are forecast at $14.11 billion.

“Transfers from the Federal Government are forecast to be $119 million higher than budget, largely due to federal disaster assistance related to natural disasters in recent years, including the 2014 floods,” the province said Wednesday in its update for the 2014-15 fiscal year.

Canadian Press reported last summer that 240 millimetres of rain fell June 28-29 in southeast Saskatchewan.

After that, flooding affected southeastern Saskatchewan and southwestern Manitoba. In September, Catastrophe Indices and Quantification Inc. (CatIQ) initially estimated insured losses at more than $140 million.

That event made Munich Re’s list of 50 major loss events of 2014, worldwide, published March 3 in Topics Geo. Munich Re reported severe floods and severe storms in Canada from June 28 through July 1 caused US$850 million in overall losses and US$500 million in insured losses.