New law expands crop insurance to cover livestock

By MPP Toby Barrett

Despite all the advances in technology, farmers are still at the whim of Mother Nature. Crop insurance that has been available for something like 90 commercially-grown crops will now be available to livestock and additional agricultural products.

New legislation titled the Agriculture Insurance Act passed in late May, amending the former Crop Insurance Act of 1996.

Crop insurance provides farmers with stability, predictability and bankability. As a generality, one of the advantages of production insurance is that it gives farmers more stability when presenting expansion plans to the banks. Having bankability allows farmers to easier expand their operation, benefitting our Ontario economy.

Insurance can now be available for beef, pork and other commodities still to be determined. The expansion of insurance beyond just crops is something farmers and agriculture groups have long requested. It lends a hand to farmers to deal with losses from natural events like weather, pests and disease.

Up until May, Ontario was the only province without the legislative authority of offer agriculture insurance plans for this broader range of products. This act will change that. The costs of the program are shared by the farmer, the provincial and federal governments on a ratio of 40:24:36.

Existing insurance is triggered when a producer’s actual production falls below guaranteed production. What the trigger will be for beef, pork and other commodities has yet to be determined. Will it only cover disasters, like BSE and PED? What about avian flu? We trust this legislation will provide an adequate response if, and when, we have a real disaster.

Although the concept is sound, I do have concerns. Will there be a premium holiday for those who sign on early? Will the calculations be clear and transparent or will the paperwork be so complex farmers will have to hire an accountant to fill it out? Another caution I have, and I have heard this from farm groups, is existing programs shouldn’t suffer because new crops are now being covered.

One concern I have is the way the government dragged its heels with the Local Food Act, and more specifically the portion that allowed farmers to receive tax receipts for donations of produce. It’s my hope this won’t happen with the Agriculture Insurance Act.

Ten years ago, we experienced the BSE crisis and saw how it decimated the province and country’s beef industry. Today it’s PED in hogs. Although the government comes through with ad hoc programs, I have been told by ag groups that having production insurance is a clearer, more bankable program and it would allow them to plan more adequately.

The interesting thing about present legislation is honey is a covered commodity under crop insurance, but honeybees are not. The Prairie provinces have a honeybee insurance program. Exactly what commodities will be covered in the bill is still not certain as the regulations come after the bill is passed.

I also think of the beginning hog farmers who were in dire need of assistance back in 2007. But, because they had not contributed in the past, they had no track record and didn’t receive assistance. These were some of the people who needed assistance the most.

I was a government MPP when the legislation was last changed in 1996. It’s close to 20 years later and changes are due, or even overdue.