More help to cover insurance premiums not expected

Alberta cattle producers want provincial help for higher price insurance premium costs, but it seems that may not be coming.

After COVID-19 struck markets, premiums to insure animals through the Western Livestock Price Insurance Program soared.

Saskatchewan announced a couple of weeks ago it would spend $5 million to help offset some of those higher costs for its producers.

Alberta Beef Producers chair Kelly Smith-Fraser said ABP believes a $20 million injection would help there.

“These premiums have been incredibly expensive compared to other years,” she said during a June 4 interview. “For example last year I paid $3 to $4 a calf. This year I think the day I bought my insurance I was just shy of $40. Right now we’re looking right around $50. That’s something really, really hard for a person to have budgeted for.”

A producer with 100 cows would be looking at a $5,000 premium at that price, she said, and would have to weigh that cost against something else such as buying feed.

However, an emailed response to The Western Producer June 8 from agriculture minister Devin Dreeshen suggested the ABP request will go unfulfilled.

He noted some premiums rose by 250 percent year-over-year and the government asked for a premium offset program under AgriRecovery.

“However, over the past couple weeks, we have seen a significant decrease in WLPIP premium costs, helping to make it a more affordable option,” he said. “While premiums have not returned to pre-COVID levels they are in decline.

“We’re looking at improving price insurance for cattle so it can be a bankable and predictable business risk management tool for ranchers.”

WLPIP is the safety net for cow-calf producers and backgrounders given that feeders will benefit from the set-aside program Ottawa announced last month, said Smith-Fraser.

The $20 million request is similar to what Alberta is contributing to the set-aside, although Smith-Fraser said she is concerned that the province may pull 30 percent of that money out to put toward a different program.

“On the fed cattle set-aside program, despite the strong recommendation from industry organizations for a bid program to be implemented in July, the Alberta government has decided to make initial payments that could spend up to 30 percent of the funding before implementing the bid program,” said the June 2 ABP newsletter.

Smith-Fraser said they have no specifics and are concerned about who would be eligible for the initial payments and how they would be allocated.

A committee is still working on how the set-aside will work, but Smith-Fraser said since that money will go to those with finished or near-finished cattle, that makes WLPIP participation more important.

“It’s something that’s there to help us out in that time of emergency for things you can’t plan for like COVID,” she said.

“Nobody can afford to risk the price of calves dropping come fall, especially not our young producers.”

According to Agriculture Financial Service Corp., participation in WLPIP in that province is down this year overall, although there are still two weeks to buy.

Manitoba Beef Producers made a similar request to its provincial government. The province hasn’t yet said whether it will contribute its 40 percent share to the set-aside program or help with premium costs.

The deadline to purchase policies was extended from May 28 to June 18 this year.

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