This is the way I see the pros and cons in crop insurance and this topic should put a little spark on this web.
There is no unity in the farming business and that would be the number one problem why all the previous crop insurance plans failed to satisfy producers.
Most insurance is setup to paid for what is lost and not to make a profit or what you should have had. ( this stands true in all insurance policies ) I understand the farmer’s way of thinking that they are insuring the short fall, but this also opens the opportunity for abuse.
The farmers have the tendency to put all their cost into on pile, including the motor home and the new combine that was only really needed for a tax write-off, and then divided by the number of cultivated acres to arrive at their production cost. So what I am trying to say is there is no one insurance plan to fairly replace everybody’s cost of production. ( That motor home was used by the wife to bring meals to her husband who was working in the field )
Government subsidized crop insurance, becomes a subsidy and has to be accountable too the world trade agreement signed by our Government. ( this is one part of the crop insurance that is not to clear to farmers ) I think this is a very important issue that the farmers should understand so they don’t compare oranges and apples when they suggest the coverage they need.
It is time that today’s farmer starts to realize that we are trading on the world markets and can no longer tell the government we need x number of dollars to make a profit to stay in business.
Now lets look at how we can set up a workable crop insurance to accommodate and be affordable to the majority of the farmers.
I think the crop insurance should be setup in two parts one to recapture you actual input cost and that would be: Seed, fertilizer, pesticides and herbicides, fuel, crop insurance, ( land rent at a reasonable rate. ) land taxes and hired help.
Land value or equipment can’t be in this cost.
One option would be to insure for this known amount ( you will have to produce bills to confirm your cost if there is a claim )
The crop insurance will have to determine the price per tonne for different crops on a yearly bases.
Crop insurance will have to confirm your production.
This insurance should be set at approximately $ 110.00 per acre and the Federal and Provincial Governments should only subsidize to that amount and the farmers insurance premium set at $10.00 per acre. ( the reason I say there should be a cap on input costs is to discourage over production and encourage good management. )
Now the shortfall part should be in a different pot, which should be financed and administered by the Government but paid for by the farmers. This part of the plan has to support it’s self so the premium rates would be worked out in a five year average.
This part of the insurance is not a subsidy.
Crop insurance doesn’t have to be mandatory, but made very clear to all farmers that all crops are insurable and there will not be any handouts because you choose not to insure.
The shortfall crop insurance premiums will have to take into account the frequency of the claims, to make it fair to all farmers. This will tell in time if these marginal areas can be farmed at a profit or confirmed that a dead horse will never standup.
This is a start to my proposed crop insurance plan ( my 2 cents worth ) and I am retiring so I will not be seeding any crop this year, but have farmed for many years and truly understand the business and people involved in farming. We all have to look at a positive future in farming.
Comments please.
There is no unity in the farming business and that would be the number one problem why all the previous crop insurance plans failed to satisfy producers.
Most insurance is setup to paid for what is lost and not to make a profit or what you should have had. ( this stands true in all insurance policies ) I understand the farmer’s way of thinking that they are insuring the short fall, but this also opens the opportunity for abuse.
The farmers have the tendency to put all their cost into on pile, including the motor home and the new combine that was only really needed for a tax write-off, and then divided by the number of cultivated acres to arrive at their production cost. So what I am trying to say is there is no one insurance plan to fairly replace everybody’s cost of production. ( That motor home was used by the wife to bring meals to her husband who was working in the field )
Government subsidized crop insurance, becomes a subsidy and has to be accountable too the world trade agreement signed by our Government. ( this is one part of the crop insurance that is not to clear to farmers ) I think this is a very important issue that the farmers should understand so they don’t compare oranges and apples when they suggest the coverage they need.
It is time that today’s farmer starts to realize that we are trading on the world markets and can no longer tell the government we need x number of dollars to make a profit to stay in business.
Now lets look at how we can set up a workable crop insurance to accommodate and be affordable to the majority of the farmers.
I think the crop insurance should be setup in two parts one to recapture you actual input cost and that would be: Seed, fertilizer, pesticides and herbicides, fuel, crop insurance, ( land rent at a reasonable rate. ) land taxes and hired help.
Land value or equipment can’t be in this cost.
One option would be to insure for this known amount ( you will have to produce bills to confirm your cost if there is a claim )
The crop insurance will have to determine the price per tonne for different crops on a yearly bases.
Crop insurance will have to confirm your production.
This insurance should be set at approximately $ 110.00 per acre and the Federal and Provincial Governments should only subsidize to that amount and the farmers insurance premium set at $10.00 per acre. ( the reason I say there should be a cap on input costs is to discourage over production and encourage good management. )
Now the shortfall part should be in a different pot, which should be financed and administered by the Government but paid for by the farmers. This part of the plan has to support it’s self so the premium rates would be worked out in a five year average.
This part of the insurance is not a subsidy.
Crop insurance doesn’t have to be mandatory, but made very clear to all farmers that all crops are insurable and there will not be any handouts because you choose not to insure.
The shortfall crop insurance premiums will have to take into account the frequency of the claims, to make it fair to all farmers. This will tell in time if these marginal areas can be farmed at a profit or confirmed that a dead horse will never standup.
This is a start to my proposed crop insurance plan ( my 2 cents worth ) and I am retiring so I will not be seeding any crop this year, but have farmed for many years and truly understand the business and people involved in farming. We all have to look at a positive future in farming.
Comments please.