Crop Insurance to help all farmers

[Steve]

Jend: I believe your summaries are stating that if the province had a complete crop failer that the governments would be paying such and such for a premium. But we in Alberta or anyother province has not had a complete crop failer.
Therefore farmer premiums have been creating the surpluis not government premiums. This is the information that I have.

We never had a program where input cost receipts had to be produced to collect insurance. The biggest reason the grip program failed was because farmers milked it big time and it was done Western Canada wide instead of regionally. Grip was also calculated on gross income and not on proven direct input cost insurrance only.

You keep stating that I want revenue or income insurance. Far from it I just want to insure my cost.

Dfarm11: the present crop insurance program is basicly useless, I take it for the Hail rider. I ask the crop insurance meeting last winter if the hail premiums covered the hail payouts or did they have to take premium money from the crop insurance to meet the payment and the answer was no that it paid for itself. My next question was why done we raise the coverage on hail insurance than. Charlie Mayor said they would consider that.

Jend: You have been fairly negative on any proposals. Do you have one that we might consider or should everyone just fend for him or herself. (notice the gender consideration here 'A').

My proposal is just a idea I had but maybe I should just stick to toiling in the soil. The Kernel

[Steve]

Kernel, I went to my Alberta crop insurance bills and if you take out yours for any year I looked at it shows that in the early nineties and the government diddled it a bit when they gave us a premium reduction of 30% ( and reduced the coverage as well) the farmer paid from 1/3 to 1/2 the total premium to provide the coverage and the two governments split the rest of the premium.It might say Net All Risk and Hail Endorsement Premium and give you payable but then there are two lines which tell you what the Feds and Ralph kicked in to reflect the true cost of the policy. It varied from year to year but in 1998 the farmer paid 43% of the total premium cost. In the early nineties we paid 1/3.

For GRIP we didn't have to produce receipts but we did have some choices as far as coverage levels went which is less cumbersome than producing receipts. Of course farmers milked GRIP. Every program gets milked whether its farmers or anybody else. In fifty years you learn farmers are no more noble than anybody else. I say that you want revenue insurance because the only way to cover costs is to insure your revenues are high enough to cover your expenses.

Am I negative? On stuff like this I am but after thirty years of farming where the production risk and costs are both high we took our capital out of Alberta and moved where it could wqork harder for us. I have never worked so hard in my life or had so much fun either. Going through this whole experience and having travelled somewhat tells me that Canada doesn't want to and probably can't do much for Western farmers so I'm on my own. That's a tough proposition for anybody but where I used to farm in high land prices and drought it made it doubly tough so we decided to give ourselves a different option. So yes I am negative on programs (I farmed through thirty years of them and only the dairy and poultry boys are guaranteed a good living and a profit at my expense and they could then afford to buy up the land) because unless something is self-sustaining it is at risk. When I read the other threads about land use, etc. I agree with a lot that is said but I know if it comes to paying for something the squirming starts. I guess that I believe I do have to fend for myself and if any of my kids want to farm they will have to realize how things work (global markets, richer governments, different attitudes in other countries) and decide if it is really anything they want to do. The problems of Western Caanadian farming are not going to disappear; the Europeans don't want to reduce farm support and could care less what Canada thinks. I said elsewhere that Lyle Vanclief is a gelding and he is politically, both domestically and in world context. The Americans haveno intention of trading fairly and demonstrate it regularly. Canadian grain farmers really don't have a voice in trade discussions because we're too small and the rest of the country doesn't swing much weight outside our borders either. Having said all that, I love farming and will continue to give it my best shot for hopefully another twenty years. It got a lot easier to get enthused when my wife and I decided to take control of our own situation and lay out a plan because a realistic plan almost always works.

[Steve]

Kernel, I went to my Alberta crop insurance bills and if you take out yours for any year I looked at it shows that in the early nineties and the government diddled it a bit when they gave us a premium reduction of 30% ( and reduced the coverage as well) the farmer paid from 1/3 to 1/2 the total premium to provide the coverage and the two governments split the rest of the premium.It might say Net All Risk and Hail Endorsement Premium and give you payable but then there are two lines which tell you what the Feds and Ralph kicked in to reflect the true cost of the policy. It varied from year to year but in 1998 the farmer paid 43% of the total premium cost. In the early nineties we paid 1/3.

For GRIP we didn't have to produce receipts but we did have some choices as far as coverage levels went which is less cumbersome than producing receipts. Of course farmers milked GRIP. Every program gets milked whether its farmers or anybody else. In fifty years you learn farmers are no more noble than anybody else. I say that you want revenue insurance because the only way to cover costs is to insure your revenues are high enough to cover your expenses.

Am I negative? On stuff like this I am but after thirty years of farming where the production risk and costs are both high we took our capital out of Alberta and moved where it could wqork harder for us. I have never worked so hard in my life or had so much fun either. Going through this whole experience and having travelled somewhat tells me that Canada doesn't want to and probably can't do much for Western farmers so I'm on my own. That's a tough proposition for anybody but where I used to farm in high land prices and drought it made it doubly tough so we decided to give ourselves a different option. So yes I am negative on programs (I farmed through thirty years of them and only the dairy and poultry boys are guaranteed a good living and a profit at my expense and they could then afford to buy up the land) because unless something is self-sustaining it is at risk. When I read the other threads about land use, etc. I agree with a lot that is said but I know if it comes to paying for something the squirming starts. I guess that I believe I do have to fend for myself and if any of my kids want to farm they will have to realize how things work (global markets, richer governments, different attitudes in other countries) and decide if it is really anything they want to do. The problems of Western Caanadian farming are not going to disappear; the Europeans don't want to reduce farm support and could care less what Canada thinks. I said elsewhere that Lyle Vanclief is a gelding and he is politically, both domestically and in world context. The Americans haveno intention of trading fairly and demonstrate it regularly. Canadian grain farmers really don't have a voice in trade discussions because we're too small and the rest of the country doesn't swing much weight outside our borders either. Having said all that, I love farming and will continue to give it my best shot for hopefully another twenty years. It got a lot easier to get enthused when my wife and I decided to take control of our own situation and lay out a plan because a realistic plan almost always works.

[Steve]

Jend: Your right, the last part of your last comment is very true. I also have farmed for 30 years have collect hail insurance a few times but over all it would not of made any different in what has happened to me as a farmer.

My attempt at creating a better crop insurance program will fall on deaf ears and light no lights in the political brains of this country.

What discourages me is the continual whinng a complaining by some farmers and farm groups.. This attitude has created a horrible image in our industry. You hear it from everyone in our society about our unprofessional attitudes.

I'am normally a fun loving guy and always try to find something humorous about any situation. I have sworn to keep a positive non whinning disposition about my challenges in my choosen profession.

But this website will sure keep you running for the anti-depressants bottle.

The kernel ( I give up on trying to help the disadvantaged).

[Steve]

Kernel:
Your right about the anti-depressants, I stay out of the coffee shops. The best remedy for depression is a sharp pencil. There are things that work but you have to find them and have to be willing to change the way things are done. The other thing to remember is that even though cropped acres around the world have been expanding, demand is also expanding and there hasn't been any significant crop failures in the world for a few years. Two years of short crops in S. America would kill a lot of market bears. There won't be a replay of the 70's even though many producers are waiting for a return to the good old days. Marketing is the key and there are and will continue to be opportunities. As charliep said at a management seminar a couple of years ago, "If the rate of change outside your enterprise is greater than the rate of change within your enterprise you're likely falling behind."

[Steve]

Jend: Hey farmings great in my part of the country lets give up on whats wrong with it and talk about what is good about it. Yields were good and prices are reasonable. In thirty years I have turned $20,000 into $2 million.
Two sons are farming with me and both of them have assests around the 1/2 million dollars already and their in their early thirties. I have no complaints about my lot in live. And Hey my daddy only gave me a chance to go farming I paid for everythink else including land at market value. My boys are doing the samething and thats the way they want to do it to. Pride and your own work makes the pencil sharper.
Now marketing: My idea of selling commodities as a producer are. Sell very little unless you have the product in the bin. Done sell by way of options(calls and puts) hedges, bases contracts or on 90 day storage tickets. All of the above insures a supply of grain for the grain company therefore keeping the market satisfied as to price. Sell only with a grain pricing orders which stipulate the price you want plus the time you will deliver. If more farmers would price this way the grain companies would bid higher to insure a supply of grain.

I have tried most of the above marketing forms and find the GPO is my best marketing choice to get close to the price I want keeping in mind a reality check with the prices on the commodities market. I may never hit the top of the market but I come away satisfied with the price that I obtained. You will be susprised how often you come close to the top of the market with out exposing any risk. Don't let grain companies tie you in to their price and delivery date, tell them your price and when you want to deliver.

The kernel

[rodbradshaw]

A different idea.
What if we could insure for frost free days, A given amount of precipitation per month and so many heat units. These are the variables that we can not control unless you live in an irrigation district.
If you can hedge your weather then it doesn't matter what the cost of your inputs are as the premium would reflect the amount X the risk factor. No more worrying about crop insurance measuring bins and fields and seeing if you are using accepted agricultural practices. It could be at lot more afforadable as the system is not open to abuse as it eliminates the individual management factor.

[TOM4CWB]

Rod,

AFSC is actively working on the rainfall side, as reinsurance is avaliable on rainfall.

The wheels turn slowly, especially when government is involved!

[rodbradshaw]

Tom
Do you think farmers would except a concept like this? Or is it to radical for us to get our heads around. It would certainly cut down on the number of bureaucrats needed to administer the program.
Rod

[TOM4CWB]

Rod,

I guess the big problem will be that rough justice will occur.

Exact losses cannot be measured, if the weather station is 10 miles away, a neighbour that recieves twice the rainfall I recieve could get the same crop insurance payment.

Or If the rainfall 10 miles away is not reduced, and my farms is, then no payments may trigger even when real rainfall shortages occurred.

I have suggested that radar images could be used for specific farms, and if these are calibrated to rainfall monitoring stations, a reasonable rainfall measuring system could be developed with enough integrity that reinsurance people would look at them.

Obviously much work is needed before this type of system will be acceptable to the average farm!