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Sask. review spurs changes in 2009 crop insurance

Changes such as yield trending and a “yield cushioning” pilot project, recommended in a review of Saskatchewan’s crop insurance offerings, are to be included in its 2009 program.

Saskatchewan Crop Insurance on Thursday rolled out its 2009 program, which it said will implement 12 of the 16 recommendations from the provincial review run by Meyers Norris Penny and released last fall.

“The needs of Saskatchewan producers were the focus of the Crop Insurance Review,” provincial Ag Minister Bob Bjornerud said Thursday. “We are implementing these program improvements based on the input of over 1,000 producers.”

Crop producers have until March 31 to adjust, cancel or apply for crop insurance coverage for the 2009 growing season, the Melville-based Crown corporation said.

Although grain prices have generally slipped from their 2008 highs, provincial insurance coverage for producers on average is increasing and premiums are decreasing slightly, the agency said.

“Current market conditions suggest coverage levels should be decreasing from last year,” Bjornerud added. “However, these program improvements are actually allowing us to increase the coverage offered to producers.”

With a total 2009 budget of $155 million, including an additional pledge of $20 million over and above the province’s additional $42 million contribution in 2008, the province’s contribution to the program this year is “the largest ever made by a Saskatchewan government,” it said.

Among the changes included in the 2009 program are:

  • yield trending, under which yields will be increased to simulate agronomic advancements, which may include improved farm management practices, technology, equipment and new or genetically modified (GM) crop varieties. “Yields for canola, identity-preserved (IP) canola, winter wheat and fall rye had the most positive and significant trends in all areas and land uses across the province and will therefore be trended upwards,” the corporation wrote.
  • a pilot yield cushioning program, meant to limit the impact of a poor growing season (such as a drought year) on an individual’s coverage level. The pilot will look at about 2,000 customers who posted low yields consecutively from 2005 to 2007, giving most who had yields below 70 per cent of their long-term individual average in 2006 and 2007 a four to eight per cent yield increase. Those with yields below 70 per cent from 2005 to 2007 would get a six to 10 per cent increase.
  • full funding for the provincial wildlife damage compensation program, giving farmers 100 per cent coverage for any damage claims of $150 and over, up from 80 per cent coverage in 2008.
  • a reduced percentage of premium costs for the enhanced irrigation pilot program, which gives eligible farmers separate coverage for irrigated and dryland acres of the same crop. Producers will pay 40 per cent of the premium for this coverage, down from 66.7 per cent, while the province picks up the difference.
  • a new “in-season” price option, which will offer coverage levels based on prices that reflect actual market conditions, not price forecasts. A six-month average (September 2009 to February 2010) would be used to establish insured prices, with an interim payment made when the claim is processed, and final payment issued after prices are finalized in February 2010.
  • an expanded number of organic crops eligible under the contract price option which provides an insured price based on a producer’s contract price and Crop Insurance’s base price. Organic crops of hard red spring wheat, hard white spring wheat, durum, Canada Prairie spring wheat, winter wheat, Canada Western extra strong wheat, triticale, and fall and spring rye will be eligible.
  • a chance for farmers to keep their maximum experience discounts of 50 per cent, through an increase in the maximum number of credits or debits a farmer can accumulate, from 13 to 16.
  • increases in the establishment benefit for farmers whose crops fail to establish by June 20, with establishment payments for large Kabuli chickpeas rising from $30 up to $70 per acre, and canola rising to $45 from $25 per acre.

As well, the provincial crop insurance agency said it is looking at options for sharing the risk of program losses with private reinsurance companies.

“This is done in most other jurisdictions across Canada and can be useful to help stabilize premium rates and share some of the program risk in significant loss years,” the agency said.

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