IG news Update,
Farmers will pay more for crop insurance after the Alberta government raised premiums by 60 per cent in its latest budget.
The budget states that farm insurance premium rates are being increased by 60 percent, “to increase the balance of the Crop Insurance Fund to the level recommended by actuarial valuation.”
“It’s not good news for farmers, but it’s something we shouldn’t be too shocked about,” John Guelli told Global News.
He’s a farmer in Westlock, Alta., about an hour north of Edmonton.
“It’s another cost we’re going to incur here on the farm.”
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Last year, crop producers paid a total of $324 million in insurance premiums.
Depending on the type of crop, the expected yield and quality of the crop, farmers were paying an estimated between $10 and $50 per acre in premiums.
“We are insuring bigger crops and they are costing us more to produce those crops, but the value of the crops has also gone up, so the amount of insurance to float has definitely gone up, Guli explained.
The additional cost from higher insurance rates makes it even more difficult for farmers as they are already dealing with fuel, fertilizer and transportation costs, which continue to rise.
“We have seen our input costs doubling or tripling in many cases over the years,” he said.
In a statement to Global News, the Ministry of Agriculture and Irrigation says the increase is mostly due to increased inputs.
“The 2023 crop insurance premium increase is primarily due to higher crop prices, more growers participating in the insurance program and the effects of the 2021 drought,” its statement read.
“Budget 2023 includes an additional $61.4 million to ensure that Agricultural Financial Services Corporation (AFSC) insurance programs have appropriate funding to support producers during challenging times.”
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The Alberta NDP is calling on the government to reverse its decision to hike insurance premiums by 60 percent.
“Sixty percent will have a significant impact on producers. This is the biggest input cost that they have to pay on an annual basis. The issue here is that producers have no idea what the amount will be,” NDP agriculture critic Heather Sweet said at a news conference on Friday.
“They have not been consulted nor informed.
“I have been getting calls all week regarding the increase and many of our crop growers had no idea this was happening. So, next month many of them will want to buy their annual insurance and they’re basically going to have sticker shock because they weren’t told in advance that this was even happening.
For farmers like Guleli, he says growth is another hurdle.
“It’s just a matter of making sure we can meet our needs and make a profit at the end of the day,” he said.
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