Crop Insurance Coverage

Res #: 28-02A
Number: 28
Year: 2002
Midterm: No
Expired: Yes
Responses Received: No

Resolution 28-02A 

WHEREAS, the maximum Saskatchewan Crop Insurance coverage with hail insurance coverage is 70%; and

WHEREAS, Federal and Provincial Governments want farmers to be responsible for covering their cost of production expenses using existing government programs instead of ad hoc programs; and

WHEREAS, in our opinion, the existing coverage of Saskatchewan Crop Insurance at 70% with the hail insurance option is not high enough to cover our cost of production;

THEREFORE BE IT RESOLVED, that SARM lobby the province to increase Saskatchewan Crop Insurance Corporation's maximum coverage with hail coverage to 80%.

Response From the Hon. Clay Serby:

On March 11, 2002, the Government of Canada and Saskatchewan announced the details of the 2002 Crop Insurance Program for Saskatchewan crop and livestock farmers. The focus of the government this year in the face of another potential drought and a difficult fiscal situation has been to support the multi-peril program for the grains sector, while providing additional insurance opportunities in the livestock sector.

We announced a new, province-wide rainfall program for forage grazing acres and a pilot rainfall program for annual crops. With these programs, we were able to give livestock producers an opportunity to insure pasture land against drought, as well as giving grain producers additional coverage opportunities in drought situations. Unfortunately, the federal government has not been receptive to our continued efforts to obtain a higher level of commitment to Saskatchewan producers from Agriculture and Agri-Food Canada, and producers have seen the effect that lack of federal commitment in the 2002 program. In order to fund the new program option, as well as deal with the increased costs due to higher crop insurance prices in 2002, it was decided the Saskatchewan Crop Insurance Program (SCIC) would not offer spot loss hail coverage or the variable price option in the multi-peril program. Spot loss hail coverage continues to be available to producers throughout the private sector hail insurance companies and through Saskatchewan Municipal Hail Insurance (SMHI). As you are aware, SMHI has requested an increase in the maximum amount of coverage they can offer from $100 per acre to $125 per acre in 2002 and to $150 per acre starting in 2005. A decision on this request is forthcoming.

Saskatchewan increased funding for the crop insurance program to maintain our cost-share at the same level as 2001. It was the lack if federal funding that resulted in producer premiums going up from 30 percent to 37 per cent, and the federal share decreasing from 35 per cent to 28 percent. While Saskatchewan has increased the budget for crop insurance by $14 million from 2001 to 2002, the federal government continues to provide $195 million for safety nets – regardless of program costs or needs. Furthermore, Saskatchewan wanted to use the $19 million of federal and provincial funding used for the Net Income Stabilization Account (NISA) interest bonus for crop insurance, however, the federal government would not agree to our request. As a result, further enhancements to the program were not possible for 2002.