WINNIPEG – Manitoba is breaking new ground by being the first province to introduce new crop insurance.
Agriculture minister Harry Enns announced last week the Gross Revenue Insurance Plan will end after the 1995 crop year. Producers will be able to sign up for the new crop insurance program in the spring.
The program is designed to:
- Provide disaster-level coverage for free. For a small administration fee, producers get 50 percent coverage of their long-term average yield.
- Be more flexible. Producers can opt to buy extra coverage, up to 80 percent. Governments will split the costs for extra coverage with farmers.
- Cost less. Producers will pay, on average, between 40 and 45 percent less for the new program than they did if they bought into both GRIP and the old crop insurance.
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Enns said GRIP, a price support program, is no longer needed because of high grain prices.
He warned that governments would not likely introduce similar programs in the future. In the past five years, Enns said GRIP paid out $800 million to Manitoba farmers alone.
“Billion-dollar payouts for crash disasters in agriculture aren’t in the cards from Ottawa or from provincial governments anymore,” Enns said.
He added it took extra persuasion for the federal government to let Manitoba make the changes. The federal government is now conducting a broad review of crop insurance across the country.
But Manitoba’s program may fit in with the review group’s recommendations. Enns said other provinces will use the program as a model.
Terry Johnson, chair of the Manitoba Crop Insurance Corporation, said he’s heard “a high level of acceptance” for the new program from other crop insurance officials in the country.
“Other provinces have seen what we’re doing here and they’re watching us to see how we make out,” Johnson said.
But one farm leader says the new program won’t take the place of GRIP, which was well-used by Manitoba farmers.
“It’s going back to the old style of crop insurance,” said Les Jacobson, president of the Keystone Agricultural Producers, a general farm lobby.
“We may come to the day when we’re going to wish we had GRIP back in as a safety net program because of the fact that it gave us not just coverage on yield, but also on the price side,” Jacobson said.
“You know what happens to cycles in agriculture. They tend to fluctuate. And sometime in the future, the trend may be down again for price.”
More security needed
Jacobson also said he hoped the new program would have higher coverage levels for new farmers, who need more security to obtain capital.
The president of the Manitoba Cattle Producers Association said the new program may encourage more farmers to take out insurance for forages.
Hay was covered by crop insurance last year, but only two percent of the acres in Manitoba were insured because of high premiums.
“Obviously, with 50 percent coverage for nothing, you would wonder why there wouldn’t be 100 percent sign-up,” Dale Smith said. “Maybe there will be.”
The program will have a three-year trial period.
