Crop Insurance Deductible

Res #: 4-11M
Number: 4
Year: 2011
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Saskatchewan Ministry of Agriculture

WHEREAS currency under crop insurance a farmer is charged a deductible on seeded acres as well as unseeded acres; and

WHEREAS farmers also pay a premium on seeded acreage for yield and quality; and

WHEREAS farmers pay a premium and are charged a deductible for acres that were seeded and flooded out;

BE IT RESOLVED that SARM Lobby the Provincial and Federal government to change the crop insurance formulas so that the net unseeded acreage be charged a deductible, not the seeded intensity acres.

Response from Honourable Bob Bjornerud, Minister of Agriculture:

Currently, the Saskatchewan Crop Insurance Corporation (SCIC) charges a deductible on seeded acres as well as unseeded acres. This is due to federal crop insurance regulations which require unseeded acreage programs to have a deductible that is equal to the long term loss rate of the program. A sound insurance program will not pay for acres that would normally be lost (unseeded) in any given year. Changing the deductible could result in the program not being feasible or overall higher costs for producers and the province.

Prior to 2007, a deductible was applied to all cultivated annual crop acres on the farm. In 2007, the SCIC changed the deductible and it is now only applied to land locations where wet acres are reported. This has substantially reduced the number of acres producers see deducted.