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Mar 4, 2023 | 06:11
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Article on global news site
Going to make the most expensive crop ever planted for many a lot more expensive, and being in a government appointed position on the agricultural products marketing council it looks bad on you to be in the article as just a farmer , you can say no when a reporter calls.
https://globalnews.ca/news/9527563/alberta-crop-insurance-premiums-farmers/Farmers will have to pay more for crop insurance as the Alberta government hikes premiums 60 per cent in its latest budget.
The budget reads that agriculture insurance premium rates are increasing 60 per cent “to raise the crop insurance fund balance back to level recommended by actuarial evaluations.”
“It’s not good news for farmers, but it’s something that we shouldn’t be too terribly shocked about either,” John Guelly told Global News.
He’s a farmer in Westlock, Alta., about an hour north of Edmonton.
“It’s another cost we’re going to have on the farm here.”
Last year, crop producers paid a total of $324 million in insurance premiums.
Depending on the type of crop, expected yield and quality of the crop, farmers were paying between an estimated $10 and $50 per acre in premiums.
“We’re insuring bigger crops and they’re costing us way more to produce those crops, but the value of the crops has also gone up so the amount of insurance to float that has certainly gone higher too,” Guelly explained.
The added cost from higher insurance rates becomes even more difficult for farmers as they’re already dealing with fuel, fertilizer and transportation costs, which continue to climb.
“We’ve seen our input costs double or triple in a lot of cases over the last couple of years,” he added.
In a statement to Global News, the agriculture and irrigation ministry says the increase is mostly due to increased costs.
“The 2023 crop insurance premium increase is mainly due to higher crop prices, more producers participating in the insurance program and impacts from the 2021 drought,” its statement read.
“Budget 2023 includes an additional $61.4 million to make sure Agriculture Financial Services Corporation (AFSC) insurance programs have appropriate funding to support producers during challenging times.”
The Alberta NDP is calling on the government to reverse its decision to hike insurance premiums by 60 per cent.
“Sixty per cent will have a significant impact on producers. It is the biggest input cost that they have to pay on an annual basis. The issue here is that producers don’t know what the amount will be,” Heather Sweet, NDP agriculture critic, said at a news conference Friday.
“They haven’t been consulted nor have they been notified.
“I’ve been making calls all week in regards to the increase and many of our crop producers weren’t aware that it was happening. So, next month many of them will be looking at purchasing their annual insurance and they’re going to be basically facing a sticker shock because they weren’t told in advance this is even happening.”
For farmers like Guelly, he says the increase is yet another obstacle.
“It’s a matter of just making sure that we can make ends meet and hopefully make a profit at the end of the day,” he said.
Last edited by mcfarms; Mar 4, 2023 at 09:05.
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Mar 4, 2023 | 11:16
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So is the cost per dollar of coverage going up or is the per acre cost higher because an acre of canola is worth $850 in 2023 (50 bu @ $17/bu) instead of $500ish in 2020 (50 bu @ $10/bu)?
I am guessing at coverage prices from 2020 before everything shot up but this is around 58% increase in gross value per acre.
If insurance cost goes up because of coverage level that makes sense, anybody have numbers for 2023 or is this just political posturing?
In 2021 the news was a 20% drop in premiums, supposedly last for 5 years (they hoped). Anybody have first hand information? I don't trust the news especially when an NDP podium is involved.
https://www.albertafarmexpress.ca/news/big-crop-insurance-premium-cut-may-last-for-years-says-afsc/
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Mar 4, 2023 | 11:50
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Does the $320 Mil in premiums last year include total premium or just farmers share. Tax payers pay 60% of the premiums so is that on top? So that would represent less than 1/2 the total cost of premiums?
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Mar 4, 2023 | 12:28
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Very bizarre article. The “journalist” should of at least listed the change in coverage.
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Mar 5, 2023 | 10:53
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https://www.alberta.ca/assets/documents/ai-crop-insurance-premiums-fact-sheet.pdf
Here is the relevant part:
"The 60 per cent increase referenced in Alberta’s Fiscal Plan relates to the 2022 budgeted premium compared to the 2023
budgeted premium, and not actual premiums. Budgeted rates are estimates, prepared months before prices and premium
rates are finalized. This year’s increase in premiums is actually an average of 22 per cent over what producers paid in 2022"
Not as big a headline when it is 22% instead of 60%, also unsure if this just drops the 20% discount from 2021 and 2022 or???
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Mar 5, 2023 | 11:14
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 Originally Posted by Ronski
https://www.alberta.ca/assets/documents/ai-crop-insurance-premiums-fact-sheet.pdf
Here is the relevant part:
"The 60 per cent increase referenced in Alberta’s Fiscal Plan relates to the 2022 budgeted premium compared to the 2023
budgeted premium, and not actual premiums. Budgeted rates are estimates, prepared months before prices and premium
rates are finalized. This year’s increase in premiums is actually an average of 22 per cent over what producers paid in 2022"
Not as big a headline when it is 22% instead of 60%, also unsure if this just drops the 20% discount from 2021 and 2022 or???
Is any increase only to farmers share of the premium or to all provincial taxpayers or even what about the federal share? Not very clear.
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Mar 5, 2023 | 11:24
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Originally Posted by wmoebis
Is any increase only to farmers share of the premium or to all provincial taxpayers or even what about the federal share? Not very clear.
It is still vague but the % is not as bad as initially reported.
I just noticed the document was released March 4 (Saturday), kind of weird for a government agency to be working friday let alone Saturday so someones phone must have gone crazy. I am guessing they wanted to get ahead of the story before Monday.
Last edited by Ronski; Mar 5, 2023 at 11:26.
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Mar 5, 2023 | 13:05
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Originally Posted by Ronski
It is still vague but the % is not as bad as initially reported.
I just noticed the document was released March 4 (Saturday), kind of weird for a government agency to be working friday let alone Saturday so someones phone must have gone crazy. I am guessing they wanted to get ahead of the story before Monday.
Ya wish someone would show full breakdown of premiums on $ per acre and total cost to farmer, to provincial taxpayer and to federal taxpayer.
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Mar 5, 2023 | 13:47
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The individual farmer proposals will be released March 15th in Alberta I understand, then we will have a better understanding of the total impact of the 2021 drought on Alberta Crop Insurance premiums.
Individual farms will have different premium increases… costs, and as an opportunity for increased coverage is available… because of higher crop prices….
If farmers don’t want increased coverage…. They can simply buy a lower coverage, for example 70% instead of 80%… thereby decreasing insurance premiums and cost.
Much ado…. About a Global Insurance sales team attempting to poach provincial Crop Insurance customers …
DYODD!!!
Cheers
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Mar 5, 2023 | 17:33
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Agriculture insurance premium
rates increasing 60% to raise the
crop insurance fund balance back
to level recommended by
actuarial evaluations
Other premiums, fees and licences revenue is forecast at $2,515 million in
2023-24, an increase of $91 million from 2022-23. Revenue grows another
$111 million to $2,626 million by 2025-26. The increase in 2023-24 is due
mainly to: $99 million for a 60% rise in agriculture insurance premium rates
necessary to replenish the crop insurance fund depleted by sizeable withdrawals
for indemnity payments in 2021-22 and 2022-23; $73 million for Alberta
Energy Regulator (AER) levies for orphan well funding and for AER’s own
operations; $14 million from higher demand and volumes at registries and land
titles; a $90 million reduction in timber royalties and fees, following several
years of strong revenue from high North American lumber prices. Over the
next two years, increases of $128 million in agriculture insurance premiums,
$24 million in ATB Financial payment-in-lieu of taxes and $13 million in AER
levies are partially offset by a drop of $53 million in timber royalties and fees.
I pulled this out of the Alberta budget document. I've got calving brain so not sure if its 99 million in additional premiums followed by 128 million in 24 and 25 for a total of 227 million or 128 million in 23 and 24 in total.
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Mar 6, 2023 | 16:31
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2019 and 2021, they were bragging about reducing rates. Too much money in the coffers. Now they jack it 60%. Go figure.
UCP governance at its finest.
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Mar 6, 2023 | 19:00
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Originally Posted by mcfarms
Agriculture insurance premium
rates increasing 60% to raise the
crop insurance fund balance back
to level recommended by
actuarial evaluations
Other premiums, fees and licences revenue is forecast at $2,515 million in
2023-24, an increase of $91 million from 2022-23. Revenue grows another
$111 million to $2,626 million by 2025-26. The increase in 2023-24 is due
mainly to: $99 million for a 60% rise in agriculture insurance premium rates
necessary to replenish the crop insurance fund depleted by sizeable withdrawals
for indemnity payments in 2021-22 and 2022-23; $73 million for Alberta
Energy Regulator (AER) levies for orphan well funding and for AER’s own
operations; $14 million from higher demand and volumes at registries and land
titles; a $90 million reduction in timber royalties and fees, following several
years of strong revenue from high North American lumber prices. Over the
next two years, increases of $128 million in agriculture insurance premiums,
$24 million in ATB Financial payment-in-lieu of taxes and $13 million in AER
levies are partially offset by a drop of $53 million in timber royalties and fees.
I pulled this out of the Alberta budget document. I've got calving brain so not sure if its 99 million in additional premiums followed by 128 million in 24 and 25 for a total of 227 million or 128 million in 23 and 24 in total.
Where did you find this, need to see it for myself.
Last edited by makar; Mar 6, 2023 at 19:09.
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Mar 6, 2023 | 19:04
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Originally Posted by Marusko
2019 and 2021, they were bragging about reducing rates. Too much money in the coffers. Now they jack it 60%. Go figure.
UCP governance at its finest.
And when in history has high claims drove up insurance rates, not in my lifetime, oh maybe wait on that thought.
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Mar 7, 2023 | 05:08
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Originally Posted by makar
Where did you find this, need to see it for myself.
page 70 of the alberta 23-26 fiscal plan, just watch for the bullet points on the left hand side and the figures are in the main paragraph beside it
Just providing the information, too busy dragging calves in to the barn these days ( and nights)to get in to thoroughly, apart from I knew they were going up and will wait until I see my proposal numbers from AFSC . unlikely to have the payouts we have seen the last 10 years and increase in coverage values without some increase in rates. I went a lot of years without claims and am on a first name basis with the adjusters after the bad year of 21and the yearly hail somewhere on here lately and the other assorted unforeseen issues. ( cough Cough BASF)
Last edited by mcfarms; Mar 7, 2023 at 06:31.
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Mar 7, 2023 | 08:55
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Dont see a thing on the PDF I found.
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Mar 7, 2023 | 20:39
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Originally Posted by makar
Dont see a thing on the PDF I found.
https://open.alberta.ca/publications/budget-2023
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Mar 7, 2023 | 21:25
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Originally Posted by mcfarms
https://open.alberta.ca/publications/budget-2023
See it now, but worded very vague, not for dumb farmers to decipher, I am pretty sure my premiums aren't going up 60% on my next policy, should know soon.
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Mar 8, 2023 | 16:09
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I had an opportunity to go through my proposal today and go through it with my AFSC representative.
He said the base crop insurance rates had increased about 10% on the base insurance.
The historical premium discount reductions /surcharges are locked at a maximum of 15% premium reduction /increase; so if your insurance premium discount was … say …20% last year, it would not reduce to below 5% premium discount off the base rate this year….
If your 2021 crop insurance payment was very large… Alberta has individual coverage with 10year experience historical averages for individual farm yield and pay out history.
Wheat and Canola have the biggest increases if you pick the same coverage level as last year, as Canola spring coverage is up $2/bu from last year. Wheat also up 10%.
Looks reasonable
Cheers
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