Most farmers should’ve seen this coming, one farmer said
By Diego Flammini
Staff Writer
Farms.com
Alberta farmers will be paying more for crop insurance.
For 2023, farmers will pay an average of 22 per cent more for crop insurance premiums compared to what they paid in 2022.
Some reporting indicated crop insurance premiums would be increasing by 60 per cent based on numbers in the latest provincial budget.
The 60 per cent increase in the budget “relates to the 2022 budgeted premium compared to the 2023 budgeted premium, not the actual premiums,” Alberta Agriculture and Irrigation says in a fact sheet. “Budgeted rates are estimates, prepared months before prices and premium rates are finalized.”
The higher cost in premiums is concerning to farmers, but not surprising.
Because crop insurance premiums are related to commodity prices, producers could’ve seen this coming, said Dean Hubbard, a producer from near Claresholm, Alta. and member of the Alberta Wheat Commission board.
“Any increase isn’t great at this time,” he told Farms.com. “But 22 per cent is something most producers should’ve been expecting given the big payouts in 2021 because it was such a disastrous crop year, plus the increase in commodity prices.”
It was in 2021 that the Alberta government provided a 20 per cent reduction in crop insurance premiums.
The increase in premiums for 2023 will help the Agriculture Financial Services Corporation (AFSC) be in a position to support farmers if another year like 2021 occurs.
“In 2021, Alberta responded to a devastating drought by supporting producers with the highest payout in the 80-year history of AFSC,” Nate Horner, Alberta’s minister of agriculture and irrigation, said in a Twitter thread dispelling the 60 per cent hike. “Now it’s time for us to rebuild that backstop and ensure we’re prepared for future droughts and severe weather.”
Not all farmers will notice a large increase in premiums.
Producers growing hard red spring wheat, for example, will recognize an increase as that crop’s value has gone up by 17 per cent compared to 2022.
But farmers growing yellow field peas may only experience a 2 per cent increase in premiums.
“If we can get a normal amount of rainfall, (these costs) could be easily absorbed,” Hubbard said.
Alberta farmers aren’t the only ones paying more for crop insurance.
In Saskatchewan, the average total premium will increase by almost $2.75 to $14.79 per acre in 2023. This is compared to $12.05 per acre in 2022.