LACOMBE, Alta. – The government has made sweeping changes to the Alberta crop insurance program to give protection from sharp drops in market prices, set floor prices for crops and expand pasture insurance.
The few farmers who’ve seen the program say they don’t know if the changes will mean a better program, more confusion or more costly premiums.
“It’s a step in the right direction but …,” said Rick Dobush of Vegreville, Alta.
“I think realistically no system is ever going to be perfect. This appears to be quite a bit more complicated, which distresses me,” said Dobush during a crop insurance briefing to a packed room of farmers at the FarmTech 2003 conference in Edmonton.
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Alberta agriculture minister Shirley McClellan announced the changes Jan. 28 at the Lacombe office of AFSC, formerly known as the Agriculture Financial Services Corp.
Major changes include:
- Spring price endorsement insurance, which protects insured farmers against significant drops in market prices between seeding and harvest.
- Revenue insurance coverage, which sets a floor price to protect farmers from low market prices.
“The spring price endorsement and the revenue insurance coverage will provide more income stability for producers, especially in years of extreme volatility in either prices or weather, and that is a distinct change in our program,” McClellan said.
“It is my hope that this will allow us to move away from ad hoc programs. Our producers don’t like them. They don’t allow any certainty, they don’t allow any planning and certainly government doesn’t like them.”
In Alberta, 20,000 producers have crop insurance contracts and an additional 10,000 have hail insurance. Still, a large number of producers choose not to take crop insurance because of cost or because they feel it doesn’t fit their operation.
McClellan said farmers should take a hard look at their farm because crop insurance is the vehicle the provincial government will use to help smooth out the variability in poor prices or poor crops.
“I do not anticipate any ad hoc programs this year with changes to this program. This will be the risk management option for producers. Because it covers price and weather, we feel that people can take advantage of this program and make their decisions accordingly,” she said.
Don Boles of Three Hills, Alta., said he doesn’t know if the changes will attract producers who haven’t taken crop insurance in the past.
“I certainly think it will entice them to look at it. It’ll probably draw in a few and it shouldn’t scare anyone away,” said Boles. Crop insurance is a regular part of his farm plan.
Other changes to the crop insurance program include:
- Protection in risk areas will be enhanced by using “cushioned yields” to help evaluate risk- area normal yields. Cushioning helps lessen the impact of low yields.
- Variable price benefit, formerly the variable price option, will now be automatically included in crop insurance policies. The benefit will be triggered when the fall market price increases by more than 10 percent to a maximum of 50 percent compared to the price at signup time.
- Expanded silage greenfeed insurance.
