Crop insurance premiums in Saskatchewan will drop significantly this year, thanks to debt reduction and a redesigned program.
The 1997 program was announced by agriculture minister Eric Upshall earlier this week, along with the news that the federal government has paid down about 65 percent of its share of the accumulated debt in the crop reinsurance fund.
Ottawa, following Saskatchewan’s lead, used its Crop Sector program funds to pay off $162 million of its $252 million share. Saskatchewan announced in November it had paid off the $150 million provincial portion.
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The debt reduction measures, and normal paydowns, leave the fund $90 million in the red, down from $425 million.
According to Saskatchewan Crop Insurance Corporation, producers will save 10 percent in premium costs due to debt reduction. Further savings come from changing the premium cost-sharing arrangement and the sign-up deadline.
Previously, for all coverage levels, producers paid half of the premiums and the federal and provincial governments each paid 25 percent.
This year, for base coverage of 50 percent of average yield, the governments will pay 40 percent each, leaving 20 percent for the producer.
Upshall said that means base coverage will cost less than $1 per acre for most producers.
Crop insurance figures show the average cost per acre for base coverage in the province’s 23 risk areas was $1.90. Under the new program, that drops to 67 cents.
Higher coverage to 60, 70 or 80 percent, and spot-loss hail insurance, will cost producers 60 percent of the premium.
Using provincial averages, the producer premium for 70 percent coverage will drop 23 percent.
In future, the sign-up deadline for crop insurance will be March 1, except this year. The date has been extended to March 15 to allow producers time to familiarize themselves with the new program.
