Alberta farmers who had the foresight to take out forage crop insurance will be paid an advance to help them buy cattle feed.
For the first time ever, the Alberta minister of agriculture has instructed the Agriculture Financial Services Corp. to begin making advance payments on hay and pasture acres insured for 1998.
“It’s so severe no grass grew, farmers have pastured their hay and they have no option but to sell their cattle,” said Merle Jacobson, senior manager of insurance operations with AFSC.
Jacobson said the advance may help some farmers buy feed so they don’t have to sell their herds.
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The hardest hit by drought are farmers in an area east of Stettler, south of Bonnyville to Medicine Hat and pockets of the Peace River area. Many farmers haven’t seen rain in more than a year. Most of the claims are expected from these areas.
About 2,500 farmers across the province have forage insurance. About 1,000 of those are in the worst hit areas and will likely make a claim for an early payout. Only 47 farmers in the Peace River region have forage insurance because there are fewer raising cattle.
Jacobson expects $4-$5 million will be paid for advances to forage insurance.
Farmers without the insurance will have to wait until the end of the crop year and file for assistance with the Farm Insurance Disaster Program, NISA or a disaster assistance loan.
Not all farmers who have forage insurance will be eligible for the 50 percent insurance advance.
There are four levels of forage insurance with 50, 60, 70 and 80 percent coverage. Only farmers who selected 80 percent coverage are eligible for the 50 percent advance. Those who selected 50 percent coverage will get a 20 percent advance.
“If you bought the cheapest, you get paid the least.”
Jacobson said the offices are bracing for a deluge of other crop insurance claims after the July 1 crop insurance claim day. He expects 1,000 to 1,500 producers will make a crop insurance claim during the first week.
Jacobson said that is about 10 times more claims than normal.
