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.”
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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 ends meet and hopefully make a profit at the end of the day,” he said.
© 2023 Global News, a division of Corus Entertainment Inc.
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