Alta. cuts crop insurance premiums

The reduction in crop insurance premiums is expected to save farmers more than $55 million in 2021. | File photo

Alberta farmers will see their crop insurance premiums reduced by 20 percent this year, the Alberta government announced Jan. 25.

The reduction is expected to save farmers more than $55 million on their premiums in 2021. For a farm with 2,000 insured acres, the provincial agriculture department and Agriculture Financial Services Corp. estimate it will save that farm about $8,000.

Alberta Agriculture Minister Devin Dreeshen said the reduction is “something in the win column for farmers.

“Really this is to help our Alberta farmers cope with the 500 percent looming increase in the federal carbon tax, a misguided clean fuel standard that’s in the pipe from the federal government, as well as an impending punitive fertilizer limit regulation which still the industry is trying to wrap their heads around what that actually will entail from the federal government,” the minister said.

About 72 percent of Alberta farmers enrol in the crop insurance program each year, he said, making it the most popular business risk management tool available to them.

“They’ll see that 20 percent reduction right away. … We’re hoping that also with this reduction we’ll have more farmers that’ll enrol and view it as more affordable to actually get crop insurance to help them manage their own risks,” said Dreeshen.

In contrast to the popularity of crop insurance, about 20 percent of Alberta farmers participate in the federal-provincial AgriStability risk management program. Dreeshen said his department is working with commodity groups to develop a margin-based replacement program for AgriStability.

A program of that type was first raised as a possibility after the federal-provincial-territorial ministerial meeting late last year. If it comes to fruition, it wouldn’t be implemented until 2023.

In the meantime, a crop insurance premium reduction can lower farmers’ expenses and help rural economies “at a time when they really need a boost,” said Dreeshen, adding that reduced premium rates will be reviewed again next year.

He was critical of federal programs including the carbon tax that will increase costs to farmers and make them less competitive on the global stage against countries without similar costs.

“If the federal government wants to help farmers they should be reducing their costs and actually have a competitive regulatory environment rather than increasing regulations on farmers,” the minister said.

The federal government plans to gradually increase its carbon tax on fuels until it reaches $170 per tonne by 2030. Though farm fuel is exempt, the tax increases costs in other areas for the agricultural sector.

Alberta’s own carbon offset program will soon expire and will not be renewed in its previous form. Dreeshen said the department is working on a replacement.

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