Saskatchewan Crop Insurance Corp. says the drought picture isn’t shaping up to be as ugly as the sketch it drew a few months ago.
Back in September, the agency was worried about running out of money. Senior officials thought claims could hit $570 million, coming dangerously close to breaking the bank.
The crown corporation collected $224 million in premiums this year and has another $370 million in reserves and other funds to pay the bills.
Officials warned the federal and provincial governments that they would have to bankroll the agency if this year’s claims topped $594 million.
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That scenario is looking less likely.
“Certainly we’re thinking that it probably won’t be as high as the $570 (million),” said Saskatchewan Crop Insurance Corp. spokesperson Gloria Visser-Niven.
As of Oct. 22 ,the agency had paid out approximately $157 million on 56,000 claims.
The totals already exceed the $133 million paid on 40,000 claims for the 2000 crop year but are far from the record of $465 million paid on 75,000 claims during the 1988 drought year.
Terry Hildebrandt, president of the Agricultural Producers Association of Saskatchewan Inc., said claim statistics don’t paint the whole drought picture.
“There’s hurt there that isn’t maybe measured in the crop insurance claim numbers,” said Hildebrandt. “A lot of the problem is in our livestock and pastures and hay and the majority of those people aren’t in the Sask crop insurance program.”
He said it’s basically a grains insurance program and the coverage that is available for hay and pasture is “very inadequate.”
The total bill for this crop year could still grow substantially. Just over $72 million has been paid on 30,000 post-harvest claims. Visser-Niven said that number will increase because farmers have until Nov. 15 to file post-harvest claims. They can actually file up until Dec. 31 but after Nov. 15 a 25 percent penalty will be assessed on the indemnity.
Hildebrandt wonders if part of the reason this year’s payouts haven’t come close to the original estimate is that adjusters have been slow to process the claims.
“Maybe the dollars aren’t spent yet because the adjusters haven’t measured the bins or whatever.”
He said it’s dangerous to draw conclusions about the severity of the drought before the final numbers are in – a sentiment shared by crop insurance officials.
