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Canada - Forage Insurance Does Help During Dry Years

2015 was a challenging year for many producers who rely on forage for seed, sale or feed.  Dry conditions are an insurable cause of loss when it comes to the Forage Insurance Program offered through the Saskatchewan Crop Insurance Program. There are a number of crops insurable under this program including tame hay, dehydrated alfalfa, sweetclover and greenfeed. Additional choices such as Establishment Benefit and Forage Diversification options are also made available under this program.

In 2015, SCIC extended the seeding deadline for greenfeed from June 30 to July 15 to give producers another option for accessing additional feed supplies.  Producers that chose to reseed a greenfeed crop paid a premium on the additional acres seeded and received full greenfeed yield-loss coverage.  This was insurable under the multi-peril insurance program.

SCIC recognizes forage provides coverage choices to help build custom-fit insurance for any farm. Producers can customize their forage insurance to their operation by selecting low, base, variable or in-season price options. The variable and in-season price options can help producers manage price fluctuations that occur throughout and after the growing season, which was the case in 2015 when the hay shortage caused prices to spike.   Producers can choose from a wide range of coverage level options available. These options include 50, 60, 70 and 80 per cent.

Regardless of your operation, SCIC has several options that meet your forage insurance needs.  Alfalfa seed may be insured under a specific yield-loss option available through SCIC’s Multi-Peril Program. Red Clover, rye grass, millet and other forage seed crops are eligible for coverage through the Diversification Option.

The Forage Insurance Program is an extremely affordable way to manage the significant risks associated with forage production primarily because governments pay 60 per cent of the premium cost. Since 2000, the Forage Insurance Program has paid $2.32 for every dollar of customer premium collected. The program is designed to provide disaster relief when producers need it most.  In 2015, forage claims are still being finalized but the average claim paid to date has been approximately $40 per acre with many customers receiving up to $100 per acre.  The average premium paid by these customers is less than $3 per acre.

The Forage Establishment Benefit Option is available to protect newly seeded forage acres intended for hay, grazing or seed production against the risk of an establishment failure. This stand-alone option is not linked to any yield-loss insurance. This option can also be selected for forage acres seeded between October 15 and June 20, however acres grazed in the year of seeding are not eligible for coverage.  The Forage Diversification Option is available for any forage feed crops that are not insurable under the basic forage insurance program.  This is an area yield program. Your coverage and any claim calculations are based on insured barley acres in your risk zone.

Finally, the Forage Rainfall Insurance Program (FRIP) offers insurance on native and tame grazing acres. This program protects pastureland in the event that seasonal precipitation is below the long term average. This program is based on historical weather data pulled from 131 weather stations located across the province. Producers do not have to register a claim. Claims are triggered when the April to July seasonal precipitation falls below the long term normal for the selected station based on monthly weightings selected by the producer.  Indemnities worth $5.4 million were paid to 94 per cent of customers who participated in FRIP in 2015 due to the extremely dry conditions throughout April and May.

Saskatchewan Crop Insurance continues to work with producer groups such as the Saskatchewan Cattlemen’s Association, the Saskatchewan Stock Growers Association and the Saskatchewan Forage Council to further improve programming so it remains on target with producer needs.

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