The Western Canadian Wheat Growers Association is calling on federal and provincial governments to strengthen crop insurance programs rather than resorting to ad hoc payments when crop losses occur due to weather-related events. Yesterday’s announcement of financial assistance for prairie farmers, while welcomed by many farmers, points to the need for changes to existing risk management programs.
“Each year, a farmer can lose his crops due to frost, drought, hail, excess moisture, or other weather-related causes,” says Kevin Bender, President of the Wheat Growers. “Rather than ad hoc payments, the Wheat Growers would like to see crop insurance programs strengthened so that farmers can adequately protect themselves against any type of production risk.”
Among program changes the Wheat Growers are seeking is the ability for farmers to purchase unseeded acreage coverage at a level that suits their needs. In Saskatchewan the unseeded acreage benefit is capped at $50 per acre (less deductions). In Manitoba, farmers have the option to purchase unseeded acreage coverage up to $65 per acre, and in Alberta coverage ranges from $25 to $70 per acre depending on whether certain input costs (e.g. fertilizer) had already been applied.
The Wheat Growers are also seeking an option for those farmers who do not enroll in the Agri-Stability program to be eligible for stronger benefits and lower premiums under crop insurance.
“Agri-Stability program may be of value to some farmers, but for many of us, we’d rather have a more dependable crop insurance program,” says Kenton Possberg, Wheat Grower director from Humboldt, SK.
The Wheat Growers note that payouts under Agri-Stability are not made on a timely basis and the program is not as “bankable” as crop insurance. “Lenders want to know that your financial risks are covered,” says Possberg. “Agri-stability doesn’t provide farmers or bankers with a satisfactory level of comfort.”
The Wheat Growers believe that a strong crop insurance program and a solid tax-sheltered savings vehicle would best allow farmers to manage the production and the market risks they face.
“Farmers are proud of what we do and most don’t want to be seen going cap in hand to governments,” says Bender. “We would rather manage our own production and financial risks through improved crop insurance programs and the opportunity to retain more of our income during profitable years.”
