Western Canadian grain and livestock producers have a new insurance product to shield them from losses.
Marsh Canada has launched Agri-Plus, a whole farm insurance program to protect farmers against events such as drought, excess moisture and high interest rates that can cause a producer’s annual revenues to fall below their historic cost of production.
“The product provides additional protection over and above the various private and public sector insurance programs,” said Doug Ketler, vice-president of risk and insurance services with Marsh.
Agri-Plus, which is underwritten by Northbridge General Insurance Corp., is designed to fill in the gaps left by government programs such as crop insurance and AgriStability.
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“One of the unique features of Agri-Plus is it’s based on your expenses. Your expenses determine your policy,” said Ketler.
Producers are covered for 95 percent of their historic cost of production with a five percent deductible. Cost of production is the average of three years of expenses as reported on a producer’s income tax returns.
The policy premium is six percent, so the premium would be $5,700, or six percent of the $95,000 coverage, if a farmer had an average cost of production over the last three years of $100,000.
Claims are triggered when revenue drops below the cost of production. Revenue includes commodities sold, AgriInsurance and AgriStability payments, crop and livestock inventories and deferred income.
Producers not enrolled in AgriStability would have to pay a two percent premium on top of the six percent base rate.
Ketler said Murray Downing, a grain and oilseed farmer from Reston, Man., developed the insurance product.
“It is developed by farmers for farmers and the need has been there for quite some time,” he said.
He said farmers expressed interest in the product at the trade shows he attended this winter.
“We expect it to be quite popular and quite successful,” Ketler said.
Producers have until March 31 of the contract year to enroll in Agri-Plus.
Marsh had hoped to roll out the product earlier, but there were delays getting it ready for the market.
