EDMONTON – Alberta farmers may soon be able to buy crop insurance for those hard to insure parts of agriculture.
With Individualized Area-Based Insurance, farmers could protect against loss of quality in forage crops, winterkill in bees, trait-specific varieties in canola, feed shortages or cover non-traditional minor crops.
The insurance is designed to fill in the gaps of traditional crop insurance, said Rick McConnell, consultant with Dymac Risk Management Solutions, which was contracted to design the crop insurance program.
“This is not to replace multi-peril crop insurance. We think this will fit well in situations that are difficult to insure,” McConnell told members of Wild Rose Agricultural Producers (WRAP) at their annual meeting.
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“It’s for quirky situations,” said McConnell.
Unlike traditional crop insurance, where farmers buy based on past cropping history and area yield, the new insurance can be custom designed for each farm based on weather, area yield or a combination of the two.
Using an interactive website, farmers can insure against drought during specific times of the year that would have the biggest impact on their crops. They can design a program that would pay if rain never fell during critical spring and summer months, or if frost came too early in the fall.
The weather data would be based on 111 weather stations across the province and farmers could choose their level of coverage.
The initial idea for individualized insurance was developed in 2005, but a combination of funding problems from the federal government and finding people to help develop the web-based program slowed the process.
McConnell said the program was designed to work in combination with AFSC, the Alberta crop insurance agency already in place, but there has been no commitment from the provincial agency to take on the program. If AFSC doesn’t, a private delivery agency would need to be found.
“My expectation is this would start slow and grow.”
Rod Scarlett, WRAP executive director, said the group hopes to have a pilot program launched by this fall to test the insurance program. Despite the delays, Scarlett believes the new program will be the most significant development in crop insurance in years.
“I think this may become one of the most important agriculture insurance products out there,” he said.
“We’re seeing high input costs, high commodity prices and the risk in agriculture is tremendous and farmers have to insure against that risk.”
