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Ontario Grain Farmer Magazine is the flagship publication of Grain Farmers of Ontario and a source of information for our province’s grain farmers. 

Understanding grain and oilseed rates for Production Insurance

Over the last month, Ontario farmers have been receiving their 2015 Production Insurance renewals and rates in the mail. When making decisions about insurance coverage for the year ahead, it’s important to understand how premium and claim rates are set and the impact of extreme crop losses in previous years.


2015 Premium rates
Premium rates are determined at renewal time. Rates can fluctuate year to year depending on the past performance of the plan across the province, prior years’ claim prices and the size of the Production Insurance Reserve Fund.

The trend for 2015 is that premium rates for most grain and oilseed plans have gone down by about 10 per cent. This decrease is a result of lower grain and oilseed claims across the province over the past few years and recent market prices.

2015 Fixed and floating claim prices
Most grain and oilseed plans have fixed and floating claim price options to give producers flexibility with the Production Insurance coverage they choose. The floating claim price is based on the actual market price at harvest time. This helps cover the at-harvest price needed to replace any production shortfall and can provide producers with flexibility when developing their marketing strategy. The fixed claim prices are set at renewal time and are intended to provide a lower premium cost alternative to the floating claim price. It provides producers with a conservative claim option that won’t fluctuate, regardless of the market.

Correcting common myths about Production Insurance

  • One bad production year doesn’t significantly impact a producer’s 10-year average farm yield. Under the program, yield buffering is applied to lessen the impact of large production losses due to an insured peril.
  • Premium discounts and surcharges ensure a producer’s premium reflects their individual track record. Discounts and surcharges are capped to help premiums stay affordable and realistic while taking into account the producer’s individual claim rate compared to the claim rate for the crop plan as a whole. Because a producer’s claim history is different for each crop, their discounts and surcharges are crop specific.
  • Premiums are shared with the government. To keep premiums affordable, the federal and provincial governments pay up to 60 per cent of the required premiums and 100 per cent of the administration cost of delivering the program. Cost-shared premiums mean the producer portion reflects risk and claim history in the province and on the individual farm, based on actual experience.
  • Don’t wait to report a loss. Report crop damage as soon as it occurs by calling Agricorp. As soon as a call is received, a report is filed and an adjuster is assigned. The adjuster may contact the producer to schedule a farm visit and inspect the damaged crop.

Looking back at the 2014 season
The 2014 growing season was difficult for producers in various parts of the province. Many farmers struggled to get their crops off the field due to cold, wet weather during harvest. For example, in Timiskaming only 50 per cent of the average farm yield was produced with some crops. Yet, despite the challenges of 2014, the total overall reported yields were in line with provincial historical averages.

2014 average yields and claims paid
Average yield
Claims paid
164 bu/acre
45 bu/acre
Soft red winter wheat
78 bu/acre

Why choose to insure
Producers deal with many factors that are beyond their control. Things like adverse weather, disease, wildlife and insect infestations can have a serious impact on production and income. Each year, Ipsos Reid conducts a customer satisfaction survey on behalf of Agricorp to assess how satisfied customers are with the delivery of government programs.

An overwhelming majority of customers agree that Production Insurance protects them from risks beyond their control, provides them with the confidence needed to invest in business improvements and helps to secure credit with lenders.

Production Insurance adds a measure of predictability to an unpredictable business. It protects farm businesses when an insured peril causes yield reductions and crop losses.

More than 16,000 Ontario producers with more than five million acres of farmland are covered by Production Insurance.

Producers can find the rates on and in their renewal packages mailed in March. Producers should contact Agricorp by May 1 to apply or make changes to their coverage.

Learn more at Agricorp. •


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