Insurance premium rates for many crops will go down this year: Agricorp
Friday, February 27, 2015
by MIKE BEAUDIN
The Ontario Soil and Crop Improvement Association has asked Agricorp to give its members a break on premium hikes this year after enduring one of the wettest harvests in decades.
OSCIA members are worried the extremely low yields caused by weeks of rain will affect the yield averages Agricorp uses in part to determine premiums.
They passed a resolution at their annual meeting in early February asking Agricorp to hold premiums at 2014 rates.
Allan Mol, past president of the OSCIA, said farmers suffered extraordinary financial hardship compounded by falling commodity prices. He said most can’t afford higher insurance premiums.
Agricorp spokeswoman Stephanie Charest said they are working closely with the OSCIA and other industry groups. She said they have not received any other requests to hold the 2015 rates at the 2014 level, noting that 2015 production insurance premiums rates for major grain and oilseed crops have gone down by about 10 per cent on average.
She said Rainy River and Thunder Bay experienced a difficult planting season, Niagara experienced extreme cold temperatures, eastern Ontario and Georgian Bay experienced an early frost, and Temiskaming experienced several challenges with the harvest season.
“During these difficult times, Agricorp met regularly with affected producers and local industry groups to assess damage, explain how buffering lessens the impact of a year with extremely low yields on future coverage, and guide them through the claim process,” said Charest in an email. “These producers will see lower premium rates and minimal impacts to their AFY (average farm yield) in their renewal packages being mailed in March.”
Agricorp will follow up directly with producers who have major changes to their surcharges or discounts to assess the change, said Charest.
She said most of the 7,650 claims have been paid for 2014 and total about $88 million. This is similar to the $84.4 million paid in 2013.
“Despite the difficult weather conditions, provincial yields for major crops last year ranged from 95 to 105 per cent of the historical provincial average,” said Charest.
She said production insurance is just one program available to farmers in Ontario. The federal and provincial governments provide other risk management programs to help producers mitigate risks.
Farmers in northeastern Ontario suffered the most severe damage. They were victimized by a slow spring start, a sopping harvest and a November snowfall that prevented many from getting their crops off.
“The whole northeast had a real disaster when it came to harvest time this past year,” said Mol. “It rained and it never quit. They were swimming in mud there. They were doing all kinds of tricks with tractors trying to get things off the field. So a lot of things were just left on the field.”
Mac Emery, an OSCIA director is a livestock producer whose farm is 100 km west of Sudbury. He also grows soybeans, barley and corn on 300 acres. He said it was the wettest harvest he’s experienced in 40 years.
Emery said he doesn’t purchase crop insurance because his losses can be offset in part from his livestock operation.
Emery said he managed to get his crops harvested but his losses were substantial. He said he lost 50 per cent of the value of his soybeans, mostly due to higher drying costs, and 25 per cent on his barley. His corn was taken off as cob meal.
“We also had a lot of straw left on field because we couldn’t get to it. The quality- deteriorates if it’s rained on every day for five or six weeks.”
He said producers who farm north of him, especially those in the Temiskaming and Cochrane area, were hit a lot harder.
Mol said many producers in that area lost almost everything.
“A lot of guys got next to nothing off for corn. Soybeans were left in the field. We had some issues in the spring in the Thunder Bay area and nothing ripened the way it should have over the season.” BF