A small business lobby group that claims thousands of farmers as members says governments must be willing to change crop insurance rules to make the program more attractive to farmers.
The Canadian Federation of Independent Business has told agriculture minister Lyle Vanclief that a good first step would be to allow provincial crop insurance agencies to return to farmers surplus money accumulated in their reserve funds.
It would require amendments to federal legislation, wrote Robert Meijer of Winnipeg, national agribusiness manager for the CFIB, in a letter to Vanclief.
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Federal rules require crop insurance agencies to maintain a certain level of reserve fund. In recent years, many funds have grown far beyond their minimum.
In Manitoba, the surplus has grown almost $200 million above the $110 million minimum, said Meijer.
“Considering the economic and environmental challenges prairie producers continue to endure, such as the current drought in Saskatchewan and Alberta, a strong majority of prairie agri-businesses agree that your safety net review should also pursue the issue of alternate ways surplus dollars in the crop insurance contingency fund could be used to benefit producers,” he wrote.
Meijer said 2,500 prairie farmers were asked in a survey for their views on what to do with crop insurance reserve fund surpluses and whether federal legislation should be changed to allow provincial agencies to distribute a portion of the surpluses as producer rebates.
“Just over two-thirds of prairie agri-owners were in favour of the idea,” he wrote.
In an Aug. 8 interview, the official said there had been no response yet from Ottawa but prairie provincial governments had not dismissed the idea.
Meijer said there are ways to reform crop insurance and the possibility of a rebate of surplus money is just one.
“But I think governments have to realize that crop insurance reform needs as many options as possible,” he said. “It seems to me that crop insurance is creaky now, moving with a lot of rust. It needs to be oiled up, made a bit more flexible.”
There are other reform ideas.
Saskatchewan agriculture minister Clay Serby has suggested a weather-based system. “That may be a great idea, although it could cost more,” said Meijer.
Provinces also are using their reserve surpluses to reduce premiums, which the CFIB official also said is a good idea. But farmers in the federation survey mainly complained the program costs too much for the coverage received.
Vanclief has cited a low rate of crop insurance purchase as evidence that farmers are not doing enough to protect themselves, even as they call for more government support.
Meijer said it is because farmers working close to the financial line want to be sure that dollars they spend are likely to return at least as much. With limited coverage and rising production costs, crop insurance does not do that.
As their highest priority, close to three-quarters of those who responded to the CFIB survey “recommended linking crop insurance coverage closer to actual production costs while a majority supported higher coverage levels.”
