NISKU, Alta. – Developments are underway on a web-based crop insurance program that will allow farmers to customize their own crop insurance program.
The on-line insurance will be based on weather, area yield, or a combination of both, said Richard McConnell, a consultant with Dymac Risk Management Solutions, which was contracted to help develop and design the program.
By using area yield and weather information, farmers can customize additional crop insurance coverage through the program, McConnell told the Wild Rose Agricultural Producers annual meeting held last week.
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“It’s a tailored, area-based insurance product,” said McConnell of the program funded by the federal government to improve risk management for farmers.
“It gives more flexibility in designing an insurance program for their own situation.”
Under the weather-based program, weather risk data will be taken from 111 weather stations across the province. For example, a cattle producer who wants to insure against rain ruining a hay crop during the key three-week haying window would choose the amount of insurance that would cover rain losses on the crop during that period.
“It’s not designed to replace crop insurance, but to be an add-on.”
While being developed in Alberta, the program is designed to work for agriculture producers across Canada, especially for crops that can’t be insured under traditional crop insurance programs.
Under a lettuce program, an Ontario lettuce producer could buy six insurance policies against rain for the six key harvest periods during summer.
Farmers could also choose to insure on their area’s yield, said McConnell. The area yield coverage would use the province’s historic crop insurance records plus yields from area farms.
McConnell said the cost of the additional insurance is still unknown and would depend on many factors including historical weather data.
Herman Schwenk of Coronation, Alta., said he questions the value of another area-based crop insurance program.
“Area yields don’t mean a damn thing. It depends on how you run your farm.”
In his eastern Alberta crop insurance region, only canola crops of less than 14 bushels an acre would trigger a payout. He needs at least 25 bu. per acre to break even.
McConnell said the beauty of the program is that farmers can use the computer based program to custom design their own additional coverage. Development of the program will continue throughout the year, he said.
