CALGARY – Charges by Alberta’s auditor general that farmers are making fraudulent hail and crop insurance claims have been dismissed as a misunderstanding.
In his report tabled Jan. 12 auditor general Donald Salmon chastised Alberta Hail and Crop Insurance Corp. for not checking claims more closely. He said it was deficient in administering the Gross Revenue Insurance Plan.
The criticism was based largely on the over $20 million in deferred cheques held by farmers who had received payments from safety net payouts and crop loss claims. Salmon indicated in his report that if cheques were being held then farmers probably didn’t need the money.
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Bob Splane, manager of the corporation, denied there are fraudulent claims being made. All claims are checked and all grain is measured, he said in an interview. Alberta is the only province to audit all claims so the opportunity for fraud is low.
He will be writing a letter to the auditor general explaining why farmers may choose to defer payment cheques. For example, if a farmer is hailed out and he accepts the money immediately he risks having no cash for the following year.
Farmers are watchdogs
To make a claim farmers estimate their production, which is then checked by an adjuster from the hail and crop corporation. In questionable situations Splane said other farmers are often the best watchdogs.
“Farmers don’t put up with people ripping off the system,” he said.
Investigations on questionable claims are done from time to time. Most are settled out of court and are often the result of mistakes, not theft, Splane said.
Agriculture minister Walter Paszkowski said the misunderstanding occurred because the auditor general isn’t familiar with common agricultural accounting practices.
“I don’t think he understands how you market agricultural products.”
Most of the criticisms directed at the corporation were over practices that have since been changed, said the minister.
The federal government recognizes deferred payments for income tax purposes. Last year, changes on claim forms included a question as to whether payments were to be deferred, he said.
