The Lucknow Sentinel, 1993-03-17, Page 38Page 22—Farm Progress '93
Crop Insurance Commission reacts to '92 season with changes.
by Mark Cripps
The 1992 growing season hat
forced many in the agricultural
industry to reanalyse and make
changes to the way they carry out
business. One of these players, the
Crop Insurance Commission (CIC),
has reacted to 1992 with a recent
announcement concerning changes
to their program.
William Jongejan, RR2 Goderich
farmer and Crop Insurance Com-
missioner, detailed these changes in
a recent discussion. He said the
changes will make the CIC program
a better deal for farmers, but added
he was very proud of the way the
farm production insurance program
carried itself through the difficulties
faced in 1992.
"I belieie we are living in times
of incredible and extreme weather
variability," said Jongejan. "In 1992
we had a very wet growing season.
In 1993, it could be the exact op-
posite and be really hot and dry.
Just look out my window. There is
nothing, normal about the weather
conditions we are experiencing."
With the weather factor, com-
bined
with the global and domestic
economic conditions, Jongejan feels
secure in the future of the CIC.
"Aslong as these patterns con-
tinue, crop insurance will persist as
a good option for growers," said
Jongejan.
NEW CHANGES
Beginning in 1993, crop insurance
claims will no longer reduce a
grower's level of coverage. Instead,
growers will move up one level of
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coverage for each continuous year
ofparticipation until the maximum
level has been reached. As well,
coverage levels have been revised
to 75,.,77, 78, 79 and 80 per cent
(10 per cent higher for com and
soyabeans). New participants will
begin at the 75 per cent level as in
the past (85 per cent for corn and
soyabeans).
Another significant change is the
replacement of the 20 per cent good
experience premium discount with
a 'surcharge/discount system. Begin-
ning' in 1993, the premium payable
for each crop insured will be ad-
justed up or down from the base
premium rate. If a grower has
claimed more than the average
claim rate, he/she can expect their
premium to increase. On the other
hand, if the grower has claimed less
than the average claim rate, he/she
can expect a premium discount.
The annual amount of gurcharge.
and discount is capped -at plus 10
per cent of the base rate and minus
20 per cent of the base rate, respec-
tively. Producers with less than four
years of experience in a plan will
have their maximum annual ad-
justments phased' in.
The CIC had hoped to change 'the
unseeded acreage benefit for 1993.
However; Jongejan explained this
was not possible, and that this
feature of the program remains
unchanged from previous years -
one-third of the guaranteed produc-
tion.
In addition, effective in the spring
of 1993, the CIC's contract with its
clients will be continuous as op-
posed . to an annual contract. Jon-
• gejan explained this means a
farmer's insurance contract will
remain in effect from year -to-year.
Due to, the fact these contracts
will be continual, the CIC has also
announced changes to the delivery
of their program. Beginning in the
spring of 1993, fanners will no"'
longer pay their premium deposit
before .planting begins. Instead, full
crop insurance premiums will be
due when crop insurance agents
contact farmers to complete final
acreage reports after planting. The
thrust of this change is to simplify
the enrolment procedures for the
farmeis and streamline ad-
ministrative procedures for the CIC.
In previous years, cry insurance
contracts had been renewed annual-
ly which made it necessary for
agents to visit farmers before ap-
plying for insurance coverage.
The CIC expects claims on the
1992 crop, will total approximately
$150 million, $75 million for corn
alone. In terms of dollars paid out,
1992 represents the largest claim
year since the inception of crop
insurance in the mid 1960s. Overall,
the premium increases for 1993
corn crop insurance average roughly
40 per cent. Premiums for corn at.
100 per cent. of the floating price
will cost farmers $14 per acre. The
80' per coin option will cost farmers •
$11.20 per acre. These pr.c
represent 90 per. cent coverage o
"com crops.
Jongejan said changes made by
the CIC this year, represent.a reac-
tion of the commission' to the
growing season that was 1992. In,
particular, he felt the addition of the `
non -regressive ,'steps for coverage
levels was proof of the' CIC'.s reac-
tionary ideology.
"With the addition of non-regres •
-
sive steps for crop insurance, On
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