Crop insurance premiums to drop

Alberta farmers might have a little more money in the bank this year, after the lowering of crop insurance premiums.

On Jan. 25, Agriculture Financial Services Corporation (AFSC) announced crop insurance premiums would be reduced by 20 per cent in 2021. About 72 per cent of farmers in the province enroll in Alberta’s crop insurance program each year.

The change will result in a producer with 2,000 insured acres saving about $8,000, according to AFSC. Producers across the province are expected to save about $55 million on crop insurance premiums.

“I’m thrilled that we can pass these savings on to our clients and proud that our healthy crop insurance program in Alberta can give producers a bit of a break when they need it most,” said Darryl Kay, AFSC’s chief executive officer, in a press release.

Premiums are based on actuary risk-assessments based on the number and intensity of predicted weather-related events. However, as actual events are variable, they may occur more or less frequently than predicted.

Overall, the last decade has been a favourable one for the province, with fewer widespread weather events causing losses than predicted. This means the amount of premiums collected have exceeded payments, according to AFSC.

The result has been a “healthy” crop reserve fund, making a premium discount this year possible. So, if any major events take place, the fund balance would decrease, and this discount strategy would need to be revisited, according to the organization.