The Saskatchewan Crop Insurance Corporation (SCIC) handled a historic number of claims in 2021.
That was due, in part, to the prolonged drought in the province, said Saskatchewan Agriculture Minister David Marit.
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SCIC received around 30,000 complaints in 2021, compared to a five-year average of around 7,800 post-harvest complaints, he said.
“Growers across the province have had to deal with dry conditions and high temperatures, which has led to crop deterioration,” Marit said.
“Combined with hailstorms, pests and extreme winds in parts of the province creating further damage, Saskatchewan growers have faced a tough season.”
The total value of crop insurance claim payments in 2021 was about $2.4 billion, said SCIC Chairman Jeff Morrow.
Producers face increased crop insurance premiums in 2022, as well as increased coverage.
Average coverage by Saskatchewan Crop Insurance Corp. (SCIC) will reach a record $405 per acre, a 48% increase over last year.
SCIC said the higher hedging amount is due to higher commodity prices and increased yield hedging.
Premiums increase to $12.05 per acre in 2022 from $8.59 in 2021.
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Marit said crop insurance coverage will reach record highs in 2022 due to rising commodity prices and increased yield coverage.
“However, the average premium rate is lower due to strong 2020 production,” he said.
“As there is a one-year lag in the calculation of premium rates, 2021 production is not used until 2023.”
He also believes that new changes to the crop insurance program will build on previous improvements.
Changes have been made to rain insurance programs for forage and corn after pasture and hayland moisture was affected by the province-wide drought last year.
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A thermal adjustment factor has been added to the rainfall data used to calculate the schedules. When the temperature reaches at least 31°C, the precipitation amounts are reduced in the monthly percentage of the normal calculation.
Morrow said they would subtract one millimeter of precipitation each day their weather stations recorded a temperature of 31C, regardless of the Humidex level.
“So for July, let’s say there are five days that reach 31 degrees or more. Then we will subtract five millimeters from the total to calculate the monthly precipitation,” he said.
“So it’s really about recognizing that when we’re in this extreme heat, all the moisture that’s not falling is definitely not available for forage yield.”
There are reasons why the baseline for the program was set at 31C, said SCIC vice president of operations Lorelei Hulston.
“The 31 degrees was selected as the temperature at which precipitation was essentially evaporating at a rate that is not as usable to the plant or as the moisture available to the plant,” she explained.
“We were picking a point where we thought it would be valuable to producers without causing the premium to increase too much.”
She added that choosing a much lower temperature would be cost prohibitive for the program.
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Marit believes a higher number of growers signing up for the crop insurance program will continue into 2022.
“In 2021, the average rainfall insurance program insured 3.15 million forage acres, compared to 2.33 million acres in 2020,” he said.
“Last year, SCIC paid out over $50 million in producer claims, a record for the program, with (an) average payout of about $34,000.”
Producers have until March 31 to request, reinstate, cancel or make additional changes to their crop insurance contracts.
SCIC is also making changes to its contract price options program.
Under the program, producers can use their contract prices to combine with the base crop insurance price for higher coverage.
SCIC said this establishes an assured price that reflects the true market value growers would receive for their crops.
It will now be available for all commercial crops, including fava beans, Khorasan wheat, fall and spring rye, sunflower, triticale, winter wheat, extra strong wheat, hard white wheat , all classes of chickpeas, caraway, irrigated beans and soybeans.
“We appreciate the changes SCIC has made to the contract pricing option,” said Shaun Dyrland, president of Saskatchewan Pulse Growers.
“This could be an attractive option for pulse growers with the new inclusion of chickpeas, soybeans and fava beans.”
Growers have until March 31 to select the crops they wish to cover under the contract price option. Contracts must be submitted to SCIC by May 31.
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