Premiums up 12 percent, insured prices up 14 percent
The Saskatchewan agriculture ministry is once again urging producers to sign up for crop insurance, saying there will be no ad hoc payment if a weather-related disaster occurs this year.
This is the second time that the province’s agriculture minister has said farmers should not expect payments through AgriRecovery.
Participation in crop insurance rose to 77 percent of all seeded acres, which was the highest level since 1992, after then-minister Bob Bjornerud made a similar announcement last year.
“I hope to see this trend continue in 2013,” said the current minister, Lyle Stewart, as he announced details of this year’s crop insurance program Feb. 11.
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Farmers who buy crop insurance will pay more this year but will also see much higher coverage levels.
The average premium rate is $9.98 per acre, up from $8.91 last year. Generally, premiums are going up 12 percent.
However, average coverage levels have risen to $194 per acre from $174 last year, and insured prices are rising about 14 percent.
As always, Saskatchewan Crop Insurance Corp. provides average figures. Individual producers’ situations will vary.
The higher numbers mean the governments also contribute more to the program. The province has allocated a record $198 million for its 24 percent share of premiums.
Producers pay 40 percent of the premium and the federal government pays 36 percent.
Higher commodity prices increase the liability held by the corporation, and this year the corporation will buy private reinsurance, as recommended in a 2008 review of the program.
Chief executive officer Shawn Jacques said private reinsurance is a way to share risk in the event of a large claim year. The corporation does reinsure with the province and Ottawa but will add private reinsurance into the mix to stabilize premiums in the future if there are lots of claims this year.
“Back in 2008, when it was looked at, liability was a little over $2 billion,” he said. “Liability is projected to be closer to $5 billion this year.”
Stewart added that there is a cost associated with reinsurance. This has been built into the premium rate.
“We feel that the potential benefits outweigh the costs now,” the minister said.
Stewart noted that the yield trending feature, which was added for canola, identity-preserved canola, fall rye and winter wheat after the 2008 review, increases coverage to producers to reflect improved yields from agronomic or technological advances.
Individual yields for both types of canola have increased 16 percent this year, while fall rye increased 18 percent and winter wheat 21 percent.
As well, yield trending will now apply to three more crops.
“Yields will increase nine percent for hard red spring wheat, 7. 8 percent for hard white spring wheat and 13 percent for oats,” Stewart said.
Other changes for 2013 include expanding the insurable areas for soybeans and corn and increasing the establishment benefit values for field peas, canola and identity-preserved canola.
The ability remains in place to top up the $70 unseeded acreage benefit by purchasing either $15 per acre or $30 per acre additional coverage.
Meanwhile, the corporation did not act specifically on a resolution from last fall’s Saskatchewan Association of Rural Municipalities convention asking that it refuse insurance to farmers who plant canola in consecutive years and thereby help prevent the spread of clubroot.
Jaques said the corporation would continue to review the risks of short rotations.
Producers have until March 31 to apply for insurance or make changes to their existing contracts.
