It’s an uncertain world out there, especially in farming — and that has more Alberta producers taking out crop insurance.
“We’re seeing more acres being insured by Alberta producers on crops — last year we were close to about 78 per cent of acres insured,” said Merle Jacobson, acting president of the Agricultural Financial Services Corporation (AFSC).
Insured acres have grown steadily over the last five years. Even a couple of years ago, only about 72 per cent of the province’s total acres were insured.
“This year, for 2016, we saw the largest increase (in crop insurance) we’ve seen for a couple of years, across the province,” said Jacobson.
More producers have elected to insure all of their eligible acres, and more producers are purchasing the maximum level of coverage — 57 per cent this year, which is well above the usual level of about 50 per cent.
“Last year, at the start of the year, it was quite dry and there was a lot of uncertainty,” said Jacobson. “It turned out OK — much better than people expected.
“People are just looking around and saying, ‘We’re not taking as much risk this year. They’re just looking around and taking as much insurance as they can in case something should happen.”
This year, AFSC has offered several enhancements to its programs, including coverage specifically for malt barley, which used to be covered under feed barley. About 1,077 producers have taken malt barley coverage. As well, organic acres are now covered separately, and 28 producers have taken advantage of this offer.
However, producers still aren’t insuring pasture and hay at the same rates as crops. Even though the number of insured acres of pasture increased by a million acres last year, only about 30 per cent of pastures are insured. Still, this is up from 25 per cent a few years ago.
Commodity producer groups have also played a role in boosting insurance uptake, and many have been talking to their members about insurance-related topics, ranging from program design, and loss-adjusting procedures to premiums and coverage.
This year, there have been 908 new applications for insurance, and 711 cancellations. Most of the latter are from producers who are exiting farming or merging with another producer.
Given that farm numbers continue to decline, that’s another sign that producers are worried about risk.
“This is one of the few years where we’ve seen new applications exceed cancellations,” said Jacobson.
Producers pay about 40 per cent of their coverage, the standard across Canada, with Ottawa picking up 36 per cent of the tab and the province 24 per cent.
The outgoing chair of the Manitoba Agricultural Services Corporation recently slammed that arrangement, saying it encourages farmers to engage in poor practices.
“Why should taxpayers be expected to pay insurance for those who have really incorrect farming practices? I don’t think that’s right,” said Frieda Krpan. “And I think now with climate change those things are going to come back to bite us in a big way.
“Clubroot is an example and there are others. I think farmers who farm properly, who rotate well, who do all the things that have to be done — drainage and other farm practices — they are the people who should have the lowest rates.”
Farmers should pay a minimum of half the costs, said Krpan.
But Jacobson said the current arrangement is fair.
“When you compare the risk of what it takes to grow a crop compared to any other kind of risk, it’s probably one of the highest risks that there is,” he said. “This is why the government has chosen, across Canada, to provide that affordable premium that allows producers to offset their risk.”