Legislative Report
(29 February 2012)

Crop Insurance Changes

With spring just around the corner and farmers in the midst of finalizing their seeding plans, the memories of last year’s soggy conditions come to the forefront. Seeded acreage in the area in 2011 was very low. Those producers that did manage to get their crops in experienced yield loss, drown outs, disease and poor quality samples. There was an increase in fall seeded crops for the 2012 crop year with most in the region germinating well and looking good at freeze up.

As farming has always been a risky business, it is just that, a business that requires a great deal of planning and decision making. Part of the business plan in any business is whether or not to carry insurance. In respect to farming it is the decision of buying crop insurance coverage to offset the risk involved in the farming operation.

Last year being the unpredictable year that it was, farmers in Saskatchewan received up to $100/ acre which included crop insurance and then extra funding in the form of ad hoc programs for flooded acres. In total 7.7 acres received coverage under the crop insurance and ad hoc program in the 2011 crop year. While the majority of producers received $100 per acre of coverage, many area producers were not in Crop Insurance and therefore only received $30 per acre.

On Feb. 22/12, the Ministers of Agriculture for both Saskatchewan and Canada announced changes to Crop Insurance. Basic coverage for unseeded acres would continue at $70/ acre and producers would be able to purchase additional coverage of $15/ acre for a premium of .53/acre on average or $30/acre for $1.06/acre on average. They also stated that there would be no ad hoc program for those producers not in Crop Insurance.

With this announcement of expanded Crop Insurance and no ad hoc programs, producers need to seriously evaluate their risk and determine their need for insurance protection. Today’s production costs are high but so are the commodity prices. Producers need to be able to cover their operating costs should they not get a crop. Each producer will need to make a management decision for their operation whether to buy crop insurance or not. The viability of a farm operation now becomes a management decision by the producer and not the decision of government or an Act of God concerning weather.

I wish all producers well in their preparation for this year’s crop year. To date the moisture conditions seem manageable as long as we do not get excessive snow or rains in March or April. I know that flooding is still a huge concern in the Lampman area and the water shed northwest of Lampman.

If you have a question about this Legislative Report or any other matter, just Contact Dan.

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