Crop Insurance Program

Res #: 21-03A
Number: 21
Year: 2003
Midterm: No
Expired: Yes
Responses Received: No

Resolution 21-03A

WHEREAS, the crop risks in farming caused by weather are beyond farmers’ control; and

WHEREAS, the current Saskatchewan Crop Insurance program does not take into consideration grain price increases due to adverse weather conditions; and

WHEREAS, Saskatchewan Crop Insurance tends to penalize farmers in the year following weather-related losses with less coverage and higher premiums;

THEREFORE BE IT RESOLVED that SARM lobby the Provincial and Federal Governments to take a leadership role by improving crop insurance coverage to better reflect actual production costs and to account for mid-season commodity price increases caused by weather-related conditions, which would make Saskatchewan Crop Insurance a viable and sought-after loss mitigation program in low crop volume years.

Response from the Honourable Clay Serby, Minister of Agriculture, Food and Rural Revitalization:

Saskatchewan supports the principle that crop insurance should be offered that reflects the value of the commodity that is lost. The re-introduction of the Variable Price Option, or something similar to reflect mid-season commodity price changes tied to weather conditions, may be considered for the future. Under the Agricultural Policy Framework (APF) Agreement it is the intention of the federal and provincial governments to work to improve risk management programs for producers. Such improvements will be affected by a trend to greater national consistency in program design as well as available funding.

The main purpose of crop insurance is to provide protection against production losses. This insurance protection is some dollar value per crop acre that is calculated from estimated market prices, the producer's yield average and the coverage level selected. In times of low market prices, the dollar value of coverage may inadequately cover production costs. Rather than attempting to address production cost coverage through the Crop Insurance Program, the Government of Saskatchewan believes producers should rely on other risk management programs and strategies available to them (including pressing the federal government to take responsibility for trade injury).