Photo courtesy Erika Rolling 

By Erika Rolling

Agriculture

Minister Horner denies claims by NDP on increasing crop insurance premiums

Mar 9, 2023 | 1:21 PM

The Minister of Agriculture and Irrigation Nate Horner says claims made by the Alberta NDP regarding insurance premiums for crops on March 3 are inaccurate.

Horner says the opposition stated that there will be a rise of 60 per cent for crop insurance for producers using coverage through the Agricultural Financial Services Corporation (AFSC), unlike the estimated average of 22 per cent the UCP budgeted for.

He says premiums are rising, “Due almost entirely to the rise in value to the crop or commodity they’re growing, year over year change from last year.”

“We’ve seen crop insurance go through a lot over the last two years. The program has really changed dramatically. It’s paid out $4.1 billion combined over the last two years… about $2.8 billion the year previous and we look like we are around $1.3 billion for payouts for last year,” he says.

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Horner notes this is due to a combination of the drought in 2021, high payouts for hail claims after hail storms in central Alberta, and the height in value in crop payouts becoming more in 2022.

“The fund has been greatly depleted over the last two years… so there is a small growth factor in the fund. But beyond that, you’re paying for your coverage,” Horner says about how producers will be able to deal with the rise of insurance premiums during hard economic times.

Calculations made by the Alberta government say increases compared to 2022 are:

• Hard Red Spring Wheat – 17 per cent
• Feed Barley – nine per cent
• Canola – 12 per cent
• Yellow Field Peas – two per cent

“The one thing you can control is having this insurance to cover these terrible years… when everything else is out of your control. As much as it’s going up, it’s a non-profit insurance program, actuarially sound and audited, looks at a 25-year lens so they can control increases in premium rate,” Horner notes on the AFSC program.

The program is 60 per cent subsidized with federal and provincial inputs. 36 per cent is paid by the federal level, 24 per cent by the province, and 40 per cent by producers.

The NDP says over 70 per cent of Alberta producers are enrolled in AFSC’s crop insurance program.

Horner says the program is; “One place there’s tremendous value for Alberta farming communities when everything else is outside of their control.”

The province notes Budget 2023 has included an additional $61.4 million to make sure AFSC insurance programs have appropriate funding to support producers during challenging times.