PORTAGE LA PRAIRIE, Man. – A new crop insurance program has hit the bull’s-eye for Dwight Braun, a farmer from Plumas, Man.
Braun is the type of farmer targeted by a national review of crop insurance. It’s looking at why more farmers aren’t buying insurance, and how to improve programs to get them back.
Braun and his father John have never bought crop insurance for their farm because it was too expensive for the low level of coverage they would have received.
But Braun is excited about Manitoba’s so-called enhanced program. For a small administration fee, he’ll get 50 percent of his long-term average yield insured, without any premiums.
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“That’s reasonable at least,” Braun said. “Then, if we have total crop failure, at least our inputs are covered.” The Brauns can also choose to buy extra coverage up to 80 percent.
One of Manitoba’s representatives on the review committee said Braun’s opinion of the new program is illuminating.
Barry Routledge said governments want farmers to like and use safety nets like crop insurance because public coffers won’t be able to provide payments for future crop disasters.
Manitoba’s new program is somewhat of an experiment. Crop insurance general manager Brian Manning called it a “bold step” that other provinces are watching closely as they decide what changes to make.
Fiscal restraint plays a major part in the new program. Neil Hamilton, research director for Manitoba Crop Insurance, said the federal government will contribute about $47 million to the program in 1996.
Hamilton said the federal government has been tightening safety net purse strings each year. In 1991, it gave Manitoba $134 million for crop insurance and the Gross Revenue Insurance Plan. By 1995, the last year of GRIP, federal contributions were down to $68 million.
Less federal help
And Hamilton estimated federal help with the new program will drop to $37 million by 1999.
The province thinks more farmers will sign up for the program.
To stay within the budget set by the federal government, Hamilton said:
- Producers will pay about 12 percent of the administration costs, traditionally paid for by the two governments.
- Insured values for crops will be set at 15 percent below market prices, as forecast by Agriculture Canada.
“We’re working in a different financial environment,” Hamilton said, explaining governments have always agreed to pay for crop insurance bills in years past. Now, if crop insurance goes into the red, it has to make shortages up to the federal government over three years.
