A Year To Be Grateful For Crop Insurance – for Aug. 30, 2010

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Between flooding in the south, drought in the north, and hail around the province, many Alberta producers are happy to be carrying crop insurance coverage again this year.

That said, Alberta Financial Services Corp (AFSC), the crown corporation that administers federally and provincially subsidized crop insurance programs, doesn’t yet have firm numbers on yield losses. “Although AFSC has had all available adjusters working, it is still too early to forecast dollar losses,” says Lorelei Hulston, AFSC’s provincial insurance manager.

One thing is for sure: the number of farmers who have filed unseeded acreage claims with AFSC is higher than average. This should come as no surprise given that initial estimates indicate approximately 250,000 acres are unseeded this year, far above the 10-year average of about 60,000 acres, and just slightly below 2007’s 10-year high of almost 291,000 acres.

Most Alberta farmers expect some orneriness from Mother Nature every year. However, this year’s weather woes are dispersed around the province differently than usual. Most of the unseeded acreage claims are for land south of Highway 1, with the greatest concentration of claims arising due to the excess moisture that hit areas south of Highway 3.

“A lot of the clients who have unseeded acreage claims probably never have in the past because it is the drier south, irrigated part of the province suffering the most damage this year,” says Hulston.

A small consolation to the excess rain in the south is that moisture-loving hay crops are generally very good. Providing that the rest of the growing season remains relatively stable, most southern producers will not have to cut cereal crops for livestock feed.

The new joint federal/provincial Agri-Recovery program, announced July 8, will provide payments of $30 per acre to producers affected by excess moisture. This program is being administered by AFSC and applies to producers whether they are covered by crop insurance or not.

Agri-Recovery

While the south has been mopping up from far too much water, the Peace continues to suffer dry conditions this year. Hulston reports that AFSC is doing some pre-harvest appraisals for crops that producers want to put to an alternate use, such as feed. Again, no yield loss estimates are available to date.

On the positive side, hail damage claims so far are lower than average. Hulston reports that up to and including the week of August 17, AFSC received 4,911 hail claims. While slightly up from the 3,689 claims filed by this point last year, it is far lower than the 7,964 claims made by mid-August in the record hail year of 2008. AFSC is not able to estimate what kind of acreage has been affected by hail to date, since claims have been filed but on-farm evaluations are not yet complete.

This is hardly the first time and will certainly not be the last time having a crop insurance policy in hand might let certain Alberta producers rest a little easier. Approximately 74 per cent of acres in the province are covered by crop insurance. Participation tends to be higher in the southern parts of the province due to the specialty and higher-risk crops grown, which means more than 74 per cent of damaged acres will be covered.

Still, Hulston acknowledges that clients are struggling with the situations on their farms and working to understand how the insurance products are going to help them manage their risk. “There are lots of people who are learning how their crop insurance policy actually works in a year like this,” says Hulston.

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AlthoughAFSChashad allavailableadjusters working,itisstilltoo earlytoforecastdollar losses.”

LORELEI HULSTON

AFSC

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