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Legislative Reports (16 February 2005)

Crop Insurance Rates Up, Coverage Down
16 February 2005

Consumers are always on the look-out for value. We all try to get the most quality for the lowest cost. When it comes to crop insurance, it seems like Saskatchewan farmers arent getting much value from the Calvert NDP. Last week, Mark Wartman made what is sadly turning into an annual announcement. Crop insurance rates are going up, coverage is going down.

Blaming lower commodity prices, Wartman said premium increases were needed to keep the insurance program running. Premiums went up by nine percent on average. The news is worse for people in the Lloydminster/Wilkie area. Premiums there are going up by 46 percent. To the north-west of Saskatoon, the increases will average between 20 and 25 percent.

And what do we get for our money? Coverage amounts to $72 an acre. Thats barely enough to cover expenses.

Over the past three years, the crop insurance record has been truly abysmal. Increases were nine percent this year, 13 in 2004, and 52 percent in 2003.

Coverage has dropped from $102 per acre down to $72 over the same period.

Thats an increase of just under 75 percent in premiums for much, much less. If it was any other kind of insurance, youd be looking for a new broker.

The problem is this: the Calvert NDP isnt running crop insurance like a true business. And I guess thats not surprising. To stay solvent and make money, an insurance pool uses the money from the good years to pay for the bad years. Over a set period of time, 15 years in the case of crop insurance, things are supposed to average out and youre usually a little bit ahead. Actuaries cant tell you whos going to die, or when youre going to die. But they, with an uncomfortable degree of accuracy, predict how many people will still be alive at a set point in the future, for a specific group of 100 people. The more they know about those people, the better their guess will be.

However, theres a problem with crop insurance. It looks like the money gained during productive years has found somewhere else to go. The people of Saskatchewan have a right to know where it is. However, information provided in Public Accounts isnt specific enough to provide a definitive answer.

The problem is the Calvert NDP is not running crop insurance like an insurance business. And until it does, producers will suffer.

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