Weather lows cause payouts to rise

Total going to Island farmers could get to as high as $39 million by year-end after difficult growing year

Agriculture Minister Robert Henderson said insurance payouts to Island farmers have totalled $11 million this year after an unusually difficult growing season.

Island farmers have been particularly hard hit by crop losses due to a late summer and colder-than-usual fall. The province has said there is a potential for $13 million in losses from the P.E.I. Agricultural Insurance Corporation this year due to the higher-than-expected insurance payouts.

In the province’s 2017/2018 operating budget, the P.E.I. Agricultural Insurance Corporation posted a $40 million surplus. Following question period on Tuesday, where the topic of crop insurances was brought up by Souris-Elmira MLA Colin LaVie, Henderson said he expected further payouts to consume $39 million of the $40 million surplus by year’s end. Most of the claims were for losses in the blueberry and potato industry.

“We anticipate that we will be making a claim to our insurance provider to backstop that. Once we reach $39 million, we will be applying for insurance for the remainder,” Henderson said in an interview with the Guardian, adding there were approximately 6,000 acres of potatoes that have not been harvested this year as a result of the weather conditions.

Souris-Elmira MLA Colin LaVie raised several questions in the legislature on Tuesday about crop insurance payments.

LaVie had told the house during question period that he had heard from Island farmers that the rates of payouts were artificially low.

“The thinking goes that large processors are urging government to keep rates low to force farmers to press on with their harvest in poor conditions,” LaVie said.

He asked Agriculture Minister Robert Henderson if crop insurance rates were subject to outside influence.

Henderson responded that the P.E.I. Agricultural Insurance Corporation was governed by the provincial and federal governments, as well as by industry groups. He also said the crop insurance board had an appeal process for farmers who were unsatisfied with the rates they are paid out for crop losses.

Farmers are usually paid out up to 75 per cent of the losses incurred during a difficult growing season, depending on the premiums paid by the farmer.

LaVie also suggested the corporation be restructured in order to accommodate anticipated future losses due to the effects of climate change.

Henderson said he expected premiums to rise in future growing seasons. He said he plans to make a request that an option be established for insurance premiums of up to 12 cents per pound. Currently, most farmers pay premiums ranging from 8 to 10 cents per pound.