Cattle Price Insurance...

[smcgrath76]

Alberta is prepping to launch a livestock price insurance program starting with beef cattle in 2009.
It will be interesting to see the level of protection available, the premiums and the structure of the program. I am not sure what impact this may have on current production and cow herd levels. As well it must be carefully crafted so that it is not countervailable.
I am sure that determining levels of protection and pricing will be an interesting process.

[PureCountry]

When you say Alberta, Sean, whom do you refer to? The Gov't specifically, AFSC, FCC?

It sounds like a make-work project of historic proportions to me

[kato]

December 3, 2008
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First-in-Canada program will help protect producers against market risks

Edmonton… A livestock insurance program, the first of its kind in Canada, will soon be offered to Alberta beef producers to help protect their operations from fluctuating market prices.

The Cattle Price Insurance Program (CPIP) will be offered by Agriculture Financial Services Corporation (AFSC) in addition to its suite of crop insurance programs. Alberta’s beef producers will be the first of the province’s livestock industries to be able to access the insurance program.

CPIP is an Alberta-made livestock insurance product tailored to provide price protection for Alberta cattle producers. The program was developed through a partnership with the federal government, the Government of Alberta and the Alberta Beef Producers.

“This type of insurance doesn’t currently exist in Canada and will be another tool our producers can use to help protect them from fluctuating cattle prices,” said George Groeneveld, Minister of Agriculture and Rural Development. “Livestock insurance will help support the livestock industry over the long term. The Cattle Price Insurance Program is one of the key initiatives highlighted in the Alberta Livestock and Meat Strategy.”

The Alberta Livestock and Meat Agency (ALMA) was instrumental in supporting this initiative and will be working closely with AFSC and the livestock industry over the next two years to increase awareness of the program.

CPIP will provide protection against drops in Alberta beef prices over a defined time period. Premiums would vary according to policy length and coverage desired. The insurance will be a voluntary, producer- funded program and will provide timely claim payments.

AFSC is targeting mid-2009 for launching a price insurance product for fed cattle and is in the design stages of a program for calves and yearlings.
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[Sawbones]

It will probably be the same as CAIS or Agri-stability...as soon as it looks as though there will be a substantial payment, they'll change the rules..in 2004 there was a payment based on loss of equity. When cattle prices came up, that loss of equity was clawed back and we were forced to take a loan. In 2006 when there would have been a substantial loss, that loss of equity no longer counted and the program was changed from CAIS to Agristability so that no payment was given. All the AB gov (AFSC in particular)is interested in is optics

[WilIow-Kreek]

Sounds like Socialism isn't all you would like it to be.

[Kathy]

Sorry, this is not the first of its kind in Canada. This is the Quebec system.

The insurance program goes hand in hand with the premise ID and RFID systems, otherwise known as ALMS, here in AB.

I found some data on the Quebec system, after two people put me onto this. One AB gov. employee stated that our ALMS will be modeled after Quebec's and that a system of "tax rebates" would be installed.

http://www.fadq.qc.ca/fileadmin/cent_docu_angl/publ/clie_agri/asra/cow_calf.pdf
Quebec Farm Income Stabilization Insurance Program.

Our Alberta government would like the hicks on the farm to believe that this is an "Alberta made" idea. [no ill intent on my part here, this is the attitude of so many in gov. and in the cities, *the wrongful idea that country folk can't think for themselves].

Were are just a hop, skip and a jump, from a system which will have government deciding who gets to raise cattle on the land. It goes beyond socialism - to tyranny.

[smcgrath76]

The modelling of the program should be of real concern in AB and across the country. If the program is modelled after Quebec's it would be countervailable. This would be akin to stating that we no longer wish to export beef to other WTO countries. Since the processors are primarily in AB, the implications for other provinces could be huge.
If the program is modelled more like a CAIS or a straight out insurance program there is more flexibility and certainly more options. I would expect that if cattle could be insured for a set dollar amount that the price would drop on feeder calves (remember the set aside program?).
Let's assume that every $100 of coverage was $2. So for a $16 premium I could lock in $800. I doubt that the buyer would outbid the insured price. If the program is producer funded as it says (even if it is Gov't backed) then the premiums have to outweigh the payouts over time (this will not be cheap coverage). If they don't then the program would be a subsidy and countervailable once we exceed our limits under the WTO.
The program will require thought and planning and some level of buy in to gain credibility. This may mean relatively low premiums at the start, and the risk of the program costing Gov't a fortune.

[Kathy]

great comments!!!!

I say that its modelled after Quebec, because this is what I'm hearing.

Let me tell you another short story. Les and I sent, via mail, our Oct.29/08 letter on ALMS, to our Premier Ed Stelmach and ALL members of the legislative assembly. We included a cover letter which stated, that our MLA, Jack Hayden, had informed us that we could send the letter to the Premier's Office and they would ensure ALL MLAs in Alberta got it.

Like a fool, I believed they had sent it onto ALL MLAs. We instructed them to notify us, right away, if this was an unreasonable request; and we would deal with the situation if there were any problems.

Well, I decided to see if the Liberals or NDP got copied in. And I waited until yesterday Dec 8/08 to ask a few. Today, Dec. 9/08 "Katie" from the Premier's Office phoned to tell us that they ONLY gave our letter to "government" MLAs. She stated the Premier's Office was not able (due to funding restrictions and personelle constraints) to send this communication to all the Members of the Legislature.

The only reason she called me (over a month later) was because the NDP and Liberals are now asking for the letter which they SHOULD HAVE received at the end of October.

Forgive me Lord, for believing that I could trust our Premier's Office to perform in a fair and open manner. Now, I need to find out if all the Conservative MLAs got the letter, or just the MINISTERS? I was so mad, I didn't ask her to clarify if the non-ministerial conservative MLAs are considered "government members" also.

[coppertop]

Kathy, I will ask my MLA if she got the letter, I will be seeing her tomorrow evening.

[per]

Kathy, I will ask my MLA as well. I will be meeting with him on Friday.

[grassfarmer]

May I suggest you folks that are on first name terms with your MLAs plonk a copy of the recent NFU cattle document in front of them when you meet with them? They are available to print off the website at www.nfu.ca or I can mail you one if you send me your address. I think this raises some rather more immediate and serious issues that they need to be dealing with.