Dont understand Canadian Crop Insurance

[riders2010]

For areas where the program in not doing what it is supposed to, the jobs for those people working there become the only positive for the area. All gov. or private business create jobs. Their effectiveness determines whether those jobs are justified or not.
We have some farms in other areas gonna get big bonuses for last years loss and this year also, while others get nothing at all, something is wrong.

What is the ultimate goal of these programs? employment or what any insurance is supposed to provide?

I see that former political hacks from liberals and sask party conservatives are using margins as criteria if they will buy your land and rent it back using investment companies. These are the same people some of which say they don't believe in government programs? So the expansion of family farm takeovers is being funded by the gov of Canada for the rich connected political hacks in some ways. Do you think that is right?

[stubblejumper]

mallee google sask crop insurance to get info on saskatchewan's program. one of the biggest problems is producers do not take the time to see how the programs work. rider for instance doesn't have a clue how the program works. it is more of a stabilization program than an insurance program.

[riders2010]

Absolutely Mallee go and do that and tell me where anything written by me above is not the way it is.

Stubblejumper has some connection to the cronies that work their. You wait stubblehumper, a few weeks before next provincial election alot is gonna be revealed about what is going on at that place.

And how does it work different? Are you arguing with the numbers? Tell me where anything above is not correct?

It is an insurance program, but if you want to call it stabilization that's fine, your such a dip do you know what that word means? Our ag ministers past and present say it is insurance program, but it doesn't matter it is supposed to help people out in tough weather problems, it's not, it's becomeing more of a burden especially young farmers that cannot pay the premiums or compete when outsiders. The program is full of political hacks hired by the government of the day, they fight amongst themselves, and if you don't have the right political card at certain times some people say the rules get bent, not in their favour either.

[riders2010]

Oh yeah, maybe Stubblehumper is confused the margins I spoke of above that is part of the Agristability program.

We in Canada when we have one program that is over administrative, and ineffective at doing what it is supposed to, we don't fix it we make another program with a whole new set of workers. Here is the kicker Mallee both are based on the same criteria of paper shuffle and yearly averages. And crop insurance money reduces your payout in the other program so 2 f'n sets of administration shuffling the same numbers around.

Agristability is income minus allowable expenses over a 5 year period, so if you get wiped out a few of those years guess what you get nothing. But if you get unusuall high crop or prices say like lentils were for a few years you can ride that unusuall occurrance all the way to the bank. How the f is that stabilizing?

It is obsurd at the least. One of the reasons I voted Conservative last time was that they were gonna get rid of the double costing of admin, they were either gonna get rid of one of the programs totally and make one good one. That is what we were told. One of the biggest reasons if I sound pissed I am.

[riders2010]

I know I shouldn't multi post, but stubblehumper likes the idea of big administration to be ineffective, as long as the jobs are secure so what as far as the program's effectiveness, that's why he supports to the death the cwb, crap insurance and agristability. It's supposed to be more than just gov and union jobs it's supposed to be about us farmers.

[malleefarmer]

devils advocate can these programmes cause over production or in another term make farmers not heed market signals because they know they are going to get money one way or the other at the end of the day, regardless of price and production?

ps im way out of my depth here and not flaming anyone

[riders2010]

You know mallee I was just trying to provide my experience to you with the programs. The way I told you is the way it has played out in our area not just my farm. I know you are not flaming anyone.

I hope others contribute, if you had 10 years of good weather, then one bad it's not so bad of a program for that situation, but you've also just begun the spiral downward in coverage also.

But lets look at the case of wet acres and late seeding, if you have coverage for 350 an acre on canola and 120 for wheat, and it gets late to seed and you are more likely be in a claim because of frost in fall, which one would you pick Mallee. In years like this it totally has an influence on seeding intentions.

Some guys that never seeded canola before and have no clue how to, can have higher coverage than someone that has grown it and just had poor weather therefore no coverage. So the guy that should be seeding it because generally area is suited except for extreme recent weather leads to poor coverage so he isn't and the guy that shouldn't be might be just for the business part of insurance.

Another scenerio and it has happenned before, Let's say you seeded canola because your coverage 20 bushel acre at 10 bucks through insurance. That is 200 coverage and acre. But you managed to grow the 20 bushels so no claim therefore the market price is what you get and lets say over production leads to 5 bucks bu, your income is 100 an acre. minus the 28 premium is 72.

We've heard already on other threads guys saying this exact same thing.

Would you pay 28 dollars an acre for stabilization or would you expect decent coverage? Absurd premium for crappy coverage and the next guy gets double the coverage for half the premium?

Not sure what stubblehumper doesn't understand, he should he has connections there, but maybe that explains why it is as screwed up as it is. If we would get rid of the cheap wheat board prices maybe the insurance would not be so distorted. But it is on other crops to some degree also but not as bad.

Hopefully that helps Mallee

[charliep]

I don't think any of the provincial crop insurance programs are rich enough to distort production. At any of the coverage levels (60, 70 or 80 % average coverage yield), the best alternative is to harvest a crop and sell it. Insurance is only there to be used in years when Mother nature steps in to reduce yields/quality. The coverage in the case of production insurance is not impacted by how or when the farmer sells the crop - incentive is to do a good job of marketing.

Canadian production insurance is based on revenue replacement. The price of this equation is set process in the winter prior to seeding with potential adjustments depending on which province - Alberta a program which increases coverage prices if average levels in October increase by more than 10 %.

Yield side is based on actual yields for that farmer based on previous experience (area averages if that farm doesn't have a yield experience record). In Alberta (other provinces are different) have methods of cushioning the impact of poor production/collection years. Example in Alberta, they don't include the previous years yields in the calculation for the current year. In does start to get included in year 2. There are also limits how much crop insurance coverage can change year to year.

The production insurance programs have to be actuarily sound (realizing government does invest in the premium side and administration). The arguements as you can see are from farmers who go years without claiming losses/want better coverage for the dollars they spend and farmers who have been in a claims situation with the impact of higher risk rating/lower coverage levels.

Likely to get beat on but that is the discussion that goes on here. There is a tie in with our whole farm income stability programs (Agristability) but that is a whole new discussion.

[riders2010]

Well Charlie it's 10 june your canola guarantee is 350 and wheat is 120 which one are you seeding? Not beating you up either but not a person around here would seed wheat!

[charliep]

The idea behind crop insurance is revenue replacement in a low production/grade year. The question then is do coverage levels accurately reflect the reality on the farm in terms of revenue (best information today).

A good part of the differences in coverage/acre is price. Prices use for canola are just under $11/bu (SK). November futures today $586 at the open - put in a basis but likely easily $12.50/bu new crop. CWRS (#2) crop insurance coverage $6/bu with the fpc (yesterday) likely close to $7.50/bu for same grade/protein.

At 70 % coverage (you put in your choice), the coverage yield used in you example for CWRS would be close to 30 bu/acre (70% of 30 bu/acre times $6/bu). Canola coverage yield would have to be over 40 bu/acre. Only you can comment whether these differences in canola and wheat yields exist on your farm/area. Some of the difference is canola likely goes in early with a full package of inputs while wheat gets seeded last with whatever inputs can be afforded. Again, only farmers can comment on the economics/profit realities (best information today) of the different crops.

Way off topic but most Saskatchewan farmers should be monitoring the variable price option program. Coverage levels are likely to increase in Saskachewans Crop Insurance summer calculation.