Saskatchewan’s weather-based insurance program for annual crops was triggered entirely by early frost this year.
Stan Benjamin, acting general manager of the Saskatchewan Crop Insurance Corp., said the program paid out $5.7 million, all because of frost Aug. 20 and Sept. 7.
“It certainly helped out a lot of producers, particularly in the northwest,” Benjamin said.
Producers insured 1.3 million acres this year, up from 513,000 acres in 2003, and the program paid out on 880,000 acres.
The program was implemented as a pilot in 2002. It protects against early fall frost or severe drought, where precipitation is 70 percent or less of the historical normal between May 1 and Aug. 31. A frost claim is triggered when the temperature falls to or below 0 C between the midpoint of the growing season and three days before the average first fall frost date.
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Coverage is based on conditions at 129 eligible weather stations.
Producers had three options: $10 per acre top-up to regular crop insurance; $25 per acre top-up (new in 2004); or, $75 per acre stand-alone weather-based insurance.
Up to 1,000 acres could be insured under either the stand-alone option or the top-ups combined. Producers had to choose a weather station within 100 kilometres of the insured land.
Most acres in the program were insured through the $10 top-up.
Benjamin said all three options were most popular in the northwest, where years of drought have reduced farmers’ yield histories.
Still, not everyone was happy with how the program worked.
“We had some issues with, ‘it froze on my farm but it didn’t freeze at the weather station’,” Benjamin said.
Some stations didn’t trigger payments but were surrounded by others that did.
Benjamin said changing the rules mid-stream was impossible.
“That would jeopardize the whole integrity of the program going into the future,” he said. “The other program (multi-peril) is designed for what happens on your farm.”
He said it is a “rough justice” insurance program and he expects it will be tweaked for next year.
Meanwhile, he said the corporation as of Dec. 10 had processed 17,000 of about 31,000 claims and paid out $100 million, mostly for quality loss.
Perhaps 20-25 percent of claimants won’t receive benefits because even after considering quality factors, their yield is still greater than their production guarantee.
Benjamin expected that all claims in the south and the northwest would be done this week, leaving the corporation to concentrate on the hardest hit area in Saskatchewan’s northeast.
