Agricorp rolls out adjustments to forage insurance programs

Monday, March 16, 2015

by SUSAN MANN

Agricultural industry representatives are lauding Agricorp’s decision to adjust its coverage requirements for forage insurance this year.

But at least one spokesman suggests the change is a first step and not a complete solution to address a program flaw that has prevented some farmers from qualifying for compensation.

Richard Horne, manager of policy and issues for Beef Farmers of Ontario describes the provincial Crown corporation’s decision to allow farmers to choose up to three rainfall collection stations to base coverage on as “obviously positive.” However, he says “there are still concerns with the program not being as effective as it could be.”

Provincial forage crop insurance plans use rainfall as a way to determine how well a crop performed during a season. The insurance plan protects farmers’ established forage if they bought coverage for insufficient rainfall during May, June, July or August or excess rain during first cut, which is between May and June. Farmers can get both insurance plans.

Previously, farmers had to pick one rainfall station and the rainfall collected there was used as the basis for their coverage. Farmers and farm groups such as Beef Farmers and the National Farmers Union say more localized weather patterns in recent years has meant there can be wide discrepancies between the amount of rain falling at the selected station and on the farm.

Now, farmers will be able to choose up to three rainfall collection stations and will be able to allocate a percentage of their coverage to each station, says Debbie Brander, Agricorp senior industry specialist. The total percentage allocated must add up to 100 per cent.

The ability for customers to select the stations gives customers more flexibility and choices to manage risk on their farm, Brander says.

Agricorp gives farmers a guideline on the 350 stations across the province they’re eligible to pick from. “They work with our staff to look at which rainfall stations best suit their location. Sometimes the closest rainfall station might not be the most representative because of topography or watercourses changing the microclimate in the area.”

Peterborough County farmer Jim Buck has used the program in the past to insure his 250 acres of hay and 20 acres of pasture. He calls the decision to expand the choice of rainfall stations “a good idea because our rainfall now is you either get a thunderstorm or you get nothing. Now that we have a choice of two to three rainfall stations, it’s a lot more indicative of what takes place in the weather.”

Ontario Forage Council manager Ray Robertson also says the change is positive. “Our current weather patterns are so sporadic that I was hearing producers saying the one station didn’t do justice.”

Horne, however, points out that more changes are needed, such as extended dry period coverage accounting to address consecutive days in a month without rain.  

This would help in situations when there is a large rainfall over a week followed by 20 other days in a month with hot and extremely dry conditions. That weather scenario could affect forage yields but wouldn’t necessarily trigger a claim payment because the monthly rainfall average could be close to the historical average, he says.

Another change that’s needed is “yield-based forage insurance similar to how crop insurance works,” Horne notes. “There has been a number of criticisms with the rainfall program not being an accurate reflection of actual yields.”

But it may be hard to create and implement such a program. Evidence from across Canada and other jurisdictions has shown “that implementing yield-based systems for forage insurance is extremely complicated,” he explains. “There’s really not another jurisdiction that we can look to and say ‘they’re implementing yield based forage insurance well and it’s working.’”

Horne is optimistic improvements will eventually be achieved, noting Agricorp is committed to working with industry groups on ways to continual improve the program. BF