HALIFAX – A group of 100 Manitoba cattle producers will be guinea pigs next year as they take part in a pilot project to see whether the crop insurance model can work for calves.
They will pay a premium to insure their 2008 calf crop and receive payments if mortality rates exceed their level of coverage.
If it proves successful, the project will likely be the template for a national “production insurance” scheme that federal and provincial politicians have been promising as part of the next generation of farm programs, members of the Canadian Cattlemen’s Association domestic policy committee heard recently.
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It is presumed such a program will eventually cover cattle, hogs and other livestock, although the pilot project focus is calves.
“We’ll be watching and all the provinces will be watching because this could be the mirror for programs across the country,” said British Columbia cattle producer Ernie Willis, chair of the CCA committee.
This autumn, the farms will be chosen and details are being worked out about costs, coverage and rules for the 2008 experiment, Martin Unrau from MacGregor, Man., told the committee during the CCA summer semi-annual meeting Aug. 16-17.
The president of the Manitoba Cattle Producers’ Association (MCPA) said the Manitoba government has worked hard to design a scheme that seems affordable and not susceptible to trade challenge as a subsidy.
Unrau said he expects premiums in the first year will be between $2 and $3 per calf insured.
“The first proposal was for a $10 premium but we said that was unrealistic.”
He said $5 per head is the upper limit of what producers could afford to pay.
Participating farmers will pay a premium based on the level of protection they want, with the $2-$3 premium buying the top coverage of 90 percent. Seventy and 80 percent coverage will also be available.
The Manitoba government will top up contributions during the first year pilot.
If coverage is at the highest level, it means loss of 10 percent of the 2008 calf crop would be absorbed by the farmer but mortality rates beyond that would be covered by what producers are proposing will be the average calf price as calculated by the CCA statistical agency Canfax.
The project has been endorsed by the MCPA, Keystone Agriculture Producers and Manitoba Pork.
“The fact that such a broad coalition of producer groups has supported it gives the pilot project some credibility,” said Unrau.
He said the expectation is that if the project works in 2008, a permanent program could be established in 2009 that could be copied across the country.
