Sask. rural municipalities argue that AgriStability and crop insurance aren’t providing adequate support to farmers
Provincial and federal governments need to step up to the plate and acknowledge there’s a problem with farm support programs, say municipal officials in east-central Saskatchewan.
Reeves and councillors from the rural municipalities of Kellross and Lipton say farm support programs, including AgriStability and provincial crop insurance, aren’t providing adequate support to grain and oilseed farmers.
Difficult harvest conditions last fall forced growers in the RM of Leross and the RM of Lipton, northeast of Regina, to leave millions of dollars’ worth of crop in the field this winter.
It remains to be seen what will be salvaged from those acres and how big the economic losses will be.
John Olinik, reeve of the RM of Kellross based at Lestock, Sask., said growers in his municipality are facing an unprecedented cash flow crisis.
Olinik estimates that nearly 40 percent of the crops in his municipality have yet to be harvested.
Yield losses could be significant and much of the grain that’s salvaged in a spring harvest will be of low quality, destined for feed or off-grade markets.
“This situation is having a big impact on the farmers…,” said Olinik.
“In normal situations, where you’re unable to harvest a quarter section or two, crop insurance and the cash advance program probably would be considered adequate. But when you’ve got a situation like we have, where some farmers still have half of their crop in the field, you start to see the shortcomings of these programs.”
Late last year, the RMs of Kellross and Lipton declared states of emergency to bring attention to the agricultural crisis in their areas.
In early December, RM officials brought their concerns to the provincial legislature, where Saskatchewan opposition leader Ryan Meili raised the issue during question period.
The municipal delegation also had a face-to-face meeting with provincial Agriculture Minister David Marit, where they called for improvements to the provincial crop insurance program, changes to AgriStability and relief from the federal carbon tax, which is applied to propane and natural gas used to dry grain.
In Saskatchewan, the carbon tax levy is equivalent to 39 percent of natural gas consumption and delivery costs on some grain farms.
“I don’t think any of us are expecting any kind of monetary compensation,” said Olinik, when asked about the trip to Regina.
“The whole purpose was to draw attention to the situation that our farmers are facing and to the fact that improvements are needed to programs like crop insurance….”
Olinik said many farmers in the area are “up against the wall,” unable to make payments against outstanding farm input bills.
The provincial crop insurance program provides some relief but according to officials from the RM of Lipton, crop insurance coverage has been scaled back to the point where many growers no longer participate in the program.
Councillor Dale Czemeres, who’s been farming since 1976, said the crop insurance program is “ineffective,” based on production guarantees that are well below actual on-farm yields.
Czemeres’ assessment of AgriStability was even less flattering.
“I think they should throw that whole program in the garbage…. Take that money, put it into a better crop insurance program and bring it up to today’s standards,” he said.
Both Czemeres and Olinik said difficulties in the farm sector are already starting to resonate into other areas of the provincial economy.
Vehicle and machinery sales are flat and many local growers will be unable to make new farm input purchases until they see what can be salvaged from a spring harvest.
Olinik said the Saskatchewan Association of Rural Municipalities and the Agricultural Producers Association of Saskatchewan are doing their best to bring attention to the farm crisis that’s facing thousands of rural residents across the province.
So far, the response from upper levels of government has been disappointing, he added.
“My gut feeling is that we shouldn’t expect a whole lot from government … but surely they could do something.”
“Take the carbon tax off drying grain. It’s not going to have a huge impact as far as helping farmers to pay their bills, but at least it would be a start.
“All we’re asking from big government is for them to acknowledge there’s a problem….”
Joel Heggie, who farms south of Leross, Sask., said a number of farmers in his area have dropped out of the crop insurance program because they don’t think it provides adequate protection.
Heggie said changes to the program are needed to ensure that more growers participate.
For example, payouts should be increased to more accurately reflect today’s cost of production and yield expectations.
Premium discounts could also be offered to growers who mitigate risk by investing in grain dryers or other technologies that allow crops to be harvested earlier.
For Warren Lutz, it remains to be seen whether crop insurance will save his farm in 2020.
The Lutzes, Warren and brother Lyle, have 4,500 acres of unharvested crop in the field this winter. They’ll have to wait a few more months to see if crop insurance payouts and spring-harvested grain are enough to pay last year’s input bills.
“I think there’s a lack of understanding about the amount of debt and stress that farmers are carrying,” said Lutz.
“To me, crop insurance is not for the farmer.…”
“What’s it going to take before the government acknowledges that we’ve got a problem in farming?”